The document discusses the legal requirements for excluding or modifying warranties in contracts. Section 2-316 of the Uniform Commercial Code specifies that language excluding implied warranties must be conspicuous to be valid. While lawyers may think using all capital letters automatically makes text conspicuous, the courts look at more factors than just formatting. Terms in small or hard-to-read capital letters buried deep in a document may still not be deemed conspicuous. Bold or larger text size are better ways to ensure terms are conspicuous rather than solely relying on capital letters. Historic practice of using all caps on typewriters does not determine legal standards of conspicuousness today.

1. Contracts drafting
What is beyond our attention

3. Ҥ 2-316. Exclusion or Modification of Warranties.
(1) Words or conduct relevant to the creation of an express warranty and words or
conduct tending to negate or limit warranty shall be construed wherever reasonable as
consistent with each other; but subject to the provisions of this Article on parol or
extrinsic evidence (Section 2-202) negation or limitation is inoperative to the extent that
such construction is unreasonable.
(2)Subject to subsection (3), to exclude or modify the implied warranty of
merchantability or any part of it the language must mention merchantability and in case
of a writing must be conspicuous, and to exclude or modify any implied warranty of
implied warranty of fitness the exclusion must be by a writing and conspicuous.
Language to exclude all implied warranties of fitness is sufficient if it states, for
example, that "There are no warranties which extend beyond the description on the
face hereof."
Caps Lock

4. “Lawyers who think their caps lock keys are instant "make conspicuous" buttons
are deluded. In determining whether a term is conspicuous, we look at more than
look at more than formatting. A term that appears in capitals can still be inconspicuous if
it is hidden on the back of a contract in small type. ... Terms that are in capitals but also
appear in hard-to-read type may flunk the conspicuousness test. A sentence in capitals,
buried deep within a long paragraph in capitals will probably not be deemed
conspicuous. Formatting does matter, but conspicuousness ultimately turns on the
likelihood that a reasonable person would actually see a term in an agreement. Thus, it
is entirely possible for text to be conspicuous without being in capitals.” (bold emphasis
added)
In the 2002 9th Circuit Court of Appeal (California and neighbouring states) decision of
Caps Lock

5. Stevenson v. TRW, Inc., 987 F.2d 288 (5th Cir. 1993) endorses
use of bold or larger type rather than ALL CAPS;
and California courts have even held that ALL CAPS text in an
location in the document may not be conspicuous even though it
is in ALL CAPS.
Broberg v. Guardian Life Ins. Co. of America, 171 Cal. App. 4th
912, 922 (2009).
Caps Lock

6. historically, the only easy way for lawyers
to make text “conspicuous” on a
typewriter was ALL CAPS

7. The Economist, 2015
“Business today is increasingly digital, services-based and driven by intangible assets,
including rights to exploit intellectual property, from patents to logos.” In addition,
businesses are shifting to more collaborative sourcing business models designed
IACCM: top negotiated terms

8. IACCM: top negotiated terms
Top Negotiated Contract Terms 2015
Top Suggested Collaborative Contracting
Terms
Limitation of Liability Alignment on Scope/Goals
Indemnification Change Management
Price/Charge/Price Changes Communication/Reporting
Service Levels and Warranties Responsibilities of the Parties
Payment Service Levels/Warranties
Intellectual Property Price/Charge/Price Changes
Warranty Limitation of Liability
Performance/Guarantees/Undertakings Delivery/Acceptance
Termination Dispute Resolution
Delivery/Acceptance Indemnification

9. Forbes, 2015
“The laws and regulations relating to trade were mostly designed for the manufacturing
age. Not only are they inappropriate, but they add to the complexity of dealing with a fast-
changing environment.”
IACCM: top negotiated terms