Warranty Clause in UK Contracts: What It Means & Example Wording

When to Include a Warranty Clause

• In sale of goods and supply of services contracts to confirm quality standards, fitness for purpose, or compliance with specifications
• In share purchase agreements (SPAs) where the seller warrants the accuracy of financial statements, the condition of assets, and the absence of undisclosed liabilities
• In software agreements to warrant that the product will perform substantially in accordance with its documentation for a specified period

Example Wording

This example wording is illustrative only. Customise it to your specific circumstances and consider seeking legal advice.

Is a Warranty Clause Enforceable in the UK?

Warranty clauses are enforceable in the UK. Under the Supply of Goods and Services Act 1982, there are implied terms that services will be carried out with reasonable care and skill. The Sale of Goods Act 1979 (now largely replaced by the Consumer Rights Act 2015 for consumer sales) implies terms about satisfactory quality and fitness for purpose. Contractual warranties supplement these statutory protections and can set higher or more specific standards. An 'entire agreement' clause and an 'exclusion of implied warranties' clause can limit liability under implied terms, subject to the UCTA reasonableness test.

Common Mistakes

• Confusing warranties with conditions — breaching a condition allows the other party to terminate the contract, whereas breaching a warranty only gives rise to a claim for damages
• Giving warranties without knowing whether they are accurate — a warranty is a statement of fact, and giving an inaccurate warranty can result in significant liability
• Failing to specify the warranty period — without a defined period, disputes can arise about how long the warranty obligation lasts