Warranty
By Gareth HoyleLast updated How we research
A warranty is a contractual promise that stated facts are true, giving the other party a claim for damages if they are not.
A warranty is a promise or assurance by one party that specific facts are true, such as that it owns the data or that it removed personal information. The Legal Information Institute notes that warranties can be express or implied, and that both are legally binding commitments.
What warranties do AI data buyers ask for?
- The seller owns the data or has the rights to license it
- Collection and disclosure complied with applicable privacy law
- De-identification followed the stated method
- The manifest is accurate
- No third-party content is included except as disclosed
How should a seller limit warranties?
A seller should limit warranties to facts within its knowledge, cap liability at the fees paid and set a time limit for claims. In US sales of goods, UCC 2-316 requires a written disclaimer of the implied warranty of merchantability to mention merchantability and be conspicuous, Whether Article 2 reaches a data license depends on the deal, so state any disclaimer expressly. Pair warranties with a capped indemnity.
In English law a breach of warranty gives a contract claim for damages, while a false statement that induced the contract can also be a misrepresentation under the Misrepresentation Act 1967.