Disclaiming Implied Warranties in Ontario Commercial Sales Contracts: What the Law Allows

Once you understand that Ontario's Sale of Goods Act automatically implies certain promises into a sale of products, the natural next question is: can a business simply write those promises away? The short answer is that some implied warranties can be limited or excluded by clear contract language, in some circumstances — but "some" and "in some circumstances" are doing a lot of work in that sentence, and a poorly drafted disclaimer can fail entirely when it matters most.

This article explains, in general terms, what disclaiming implied warranties actually involves and where sellers commonly get it wrong.

The General Principle

Contract law generally allows parties to agree to modify or exclude default rules that would otherwise apply to their transaction, including some of the implied conditions and warranties that come with a sale of goods. This is why you see "as is" clauses, warranty disclaimers, and limitation of liability provisions in commercial contracts. But this freedom is not unlimited:

• Exclusion language has to be clear and specifically address what it's excluding — vague or generic wording is less likely to be read as covering a specific implied warranty.
• Some protections exist specifically to protect a party (particularly a consumer buyer) and are harder, or impossible, to contract out of, depending on the nature of the transaction.
• A court interpreting an exclusion clause will generally read it strictly against the party relying on it — meaning ambiguity tends to be resolved against the seller trying to escape a warranty.
• The context of the sale matters. A carefully negotiated commercial contract between two sophisticated businesses is treated differently than a standard-form contract presented to a buyer with no real opportunity to negotiate.

Steps to Drafting a Disclaimer That Has a Real Chance of Holding Up

1. Identify exactly what you're trying to exclude. A generic "no warranties" line is weaker than language that specifically addresses merchantable quality, fitness for a particular purpose, and correspondence with description (or sample), where relevant to your product.
2. Use plain, unambiguous language. Courts look for clarity, not cleverness. State plainly what is and is not being promised about the goods.
3. Make sure the buyer actually sees the disclaimer before or at the time of sale. A disclaimer buried in fine print discovered only after the sale is complete carries far less weight than one presented and accepted up front.
4. Distinguish between excluding a warranty and limiting the remedy for breaching one. Some sellers focus on excluding the warranty itself; others focus on capping what a buyer can recover (for example, limiting the remedy to repair or replacement rather than full damages). Both approaches are used, and which fits your business depends on your risk tolerance and your product.
5. Consider whether you're dealing with a consumer or a business buyer. Broader exclusions that might be acceptable in a sophisticated B2B contract are less likely to be enforceable, or may be outright prohibited, in a consumer sale.
6. Have the clause reviewed against your actual product and sales process — a disclaimer written for one type of product or transaction doesn't automatically transfer cleanly to another.

Where Disclaimers Commonly Fail

• They're added after the fact. A disclaimer that first appears on an invoice mailed after the goods were already ordered and shipped is much less likely to be treated as part of the agreed contract.
• They're inconsistent with the seller's own representations. If sales staff or marketing materials made specific promises about a product's quality or suitability, a boilerplate disclaimer buried in the terms may not erase those representations.
• They're too vague to identify what's actually being excluded. General "no warranties of any kind" language is weaker than language that names the specific implied terms being addressed.
• They attempt to exclude protections the law doesn't allow parties to exclude, particularly in consumer transactions — attempting to go further than the law allows can put the entire clause, not just the overreaching part, at risk of being struck down.
• They were never actually agreed to. If there's no clear evidence the buyer had a genuine opportunity to see and accept the terms, a court may find the disclaimer simply isn't part of the contract at all.

Frequently asked questions