Schmidt, Sethi & Akmajian Blog

Contracts: Disclaimer and Waiver of Implied Warranty of Workmanship & Habitability

Posted by Ted A. Schmidt | Oct 04, 2022 | 0 Comments

Contracts: Disclaimer and Waiver of Implied Warranty of Workmanship & Habitability

Zambrano v. M&RC II LLC, No. CV-21-0205-PR (September 28, 2022) (J. Timmer)


Plaintiffs purchased a new home from defendants. The contract of sale included a limited express warranty and disclaimer and waiver of the more expansive common law implied warranty of workmanship and habitability.  Plaintiffs sued defendant alleging defects discovered in the home after purchase constituted a breach of the implied warranty. The trial court granted defendant summary judgment finding plaintiffs had indeed waived the implied warranty. The Arizona Court of Appeals reversed. The Arizona Supreme Court reversed and remanded the trial court and vacated the court of appeals.

The court recognized the conflict between public policies favoring freedom of contract and those favoring protection of consumers under an implied warranty of workmanship and habitability. Here the court determined that public policy designed to protect buyers of unequal bargaining power to builders required a holding that a seller cannot avoid enforcement of the implied warranty by providing for a more restrictive express warranty in the purchase agreement along with a disclaimer and waiver of the implied warranty.

This inequality in bargaining power, expertise, and

knowledge distinguishes the new-home-buying scenario from ones in

which the parties are on similar footing and are thus better able to decide

what contract terms serve their individual interests.

Enforcing the disclaimer and waiver here would grievously

injure homebuyers and the public welfare as doing so would likely spell the

end for the implied warranty and eliminate the above-described

protections. Builders would almost certainly include a disclaimer and

waiver in every purchase agreement with the new homebuyer lacking any

realistic ability to negotiate deletion of the term. And, as has already

occurred in Arizona and reflected in the public record, the builder would

surely record the disclaimer and waiver to provide notice to subsequent

homebuyers and prevent them from enforcing the implied warranty, as the

law currently permits, even though they had no say in waiving a warranty

that arose from the construction itself.

About the Author

Ted A. Schmidt

Ted's early career as a trial attorney began on the other side of the fence, in the offices of a major insurance defense firm. It was there that Ted acquired the experience, the skills and the special insight into defense strategy that have served him so well in the field of personal injury law. Notable among his successful verdicts was the landmark Sparks vs. Republic National Life Insurance Company case, a $4.5 million award to Ted's client. To this day, it is the defining case for insurance bad faith, and yet it is only one of several other multi-million dollar jury judgments won by Ted during his career. He is certified by the State Bar of Arizona as a specialist in "wrongful death and bodily injury litigation".


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Our team works together - for you!

Our award-winning lawyers are backed by a talented, caring team of legal professionals, paralegals, bilingual assistants, notaries, and others - all dedicated to you, your case, and the compensation you deserve.

No fees and no costs until we win.

As such we always have your case and your best interest in mind. When you win, we win too by providing the best legal care possible.

Thorough investigation and preparation.

We tirelessly and thoughtfully prepare every case we represent as though it was going to trial. This lets insurance companies know that we are a force to be reckoned with. As such, we settle successfully 98% of the time.