A disclaimer of implied warranty is a common clause in many construction documents designed to limit a contractor's risk against unanticipated liability. There are limits to what can be disclaimed. For example, a builder's responsibility for a new home that is rendered uninhabitable by extensive water intrusion may not likely to be absolved by a broad disclaimer of implied warranty. But, it may release a builder from claims that a house is uninhabitable due to drywall nail pops, shrinkage cracking in a foundation wall, and other cosmetic flaws. Or not.
In a recent case in Arizona described in an October 28, 2021 article by lawyer Mark W. Vyvyan, a builder was sued by a homeowner after closing for "breach of the implied warranties of habitability and workmanship" for what the homeowner claimed where construction defects, which included "popped nails in the drywall and foundation problems." Because the builder had a contractual disclaimer, the court initially dismissed the implied warranty claim. But the homeowner appealed. Her lawyers leaned on prior rulings, including a 1979 Arizona Supreme Court ruling that eliminated caveat emptor (buyer beware) as a rule for newly built homes. Because of that, and the fact that there had been no subsequent legislation supporting warranty disclaimers in Arizona, the appeals court ruled that the implied warranty disclaimer in the builder's contract was unenforceable.
Even though some states may allow a waiver of implied warranty, it may not be a reliable defense against a homeowner's claim. Vyvyan urges builders to familiarize themselves with warranty laws in their state. A review of the explicit warranties and disclaimers in the contract may also be advisable, as many states will not allow blanket disclaimers, and require very explicit language to describe what can be disclaimed.
