- 14-May-2025
- Personal Injury Law
Disclaimers or liability waivers are often used by companies to limit or avoid responsibility for damages or injuries caused by their products. These disclaimers typically attempt to limit the company’s liability by notifying consumers that they are assuming certain risks when using a product. While these disclaimers may provide some level of protection, they are not always enforceable and have limitations under Indian law, especially when it comes to consumer protection and product liability.
General Protection: A disclaimer that exempts a company from liability may provide limited protection, but it cannot absolve the company of all responsibility, especially in the case of negligence, gross negligence, or defective products.
Indian Consumer Protection Laws: The Consumer Protection Act, 2019 provides strong consumer rights, and disclaimers cannot override these rights. If a product causes harm due to defects or unsafe design, a disclaimer cannot prevent the consumer from claiming compensation.
Section 2(34) of the Consumer Protection Act defines a defective product as one that is unsafe or fails to meet reasonable expectations of safety. A company cannot disclaim liability for such defects, particularly when consumer safety is compromised.
Imbalance of Power: Indian courts often recognize that consumers typically have less bargaining power than manufacturers or companies. If a company includes a disclaimer in a contract, it may be considered unconscionable or unfair, especially if the consumer has no real option to negotiate the terms.
Section 23 of the Indian Contract Act prohibits contracts that are unconscionable or that impose excessive restrictions on the consumer. In such cases, disclaimers that waive responsibility for injuries caused by a defective product may not be enforceable if they are deemed unreasonable.
A company cannot disclaim liability if the injury or harm is caused by its negligence or gross negligence. Disclaimers are ineffective when the company’s actions (or lack of proper care) contribute to the defect.
For example, if a manufacturer knowingly sells a defective product that poses a risk to consumers' safety, they cannot include a disclaimer that absolves them from liability in case of injury.
While disclaimers may be used to warn consumers about the risks of a product, the key factor is whether the warning is adequate and whether the company took proper steps to ensure the product’s safety.
If a company sells a product with adequate instructions and warnings about risks but fails to address underlying defects, the company may still be held liable for product liability, even if a disclaimer is included.
Example: A company may warn users to handle a product carefully to avoid injury, but if the product is defectively designed and leads to harm, the disclaimer will not shield the company from liability.
Courts’ View on Disclaimers: Indian courts have generally been skeptical of disclaimers that attempt to limit a company’s liability, especially if the disclaimer is seen as unreasonable or misleading to the consumer.
In consumer protection cases, the courts often prioritize the safety and well-being of consumers over the business interests of companies.
For instance, in cases where a manufacturer or seller includes a disclaimer on a product that is found to be inherently dangerous, the disclaimer may be deemed unenforceable if the product is unsafe for general use.
M/s. Mahindra and Mahindra Ltd. v. M/s. Consumer Action Group: The case highlighted the limits of disclaimers, where the manufacturer’s attempt to exclude liability for safety issues was not upheld because the defect was not obvious to the consumer at the time of purchase.
National Consumer Disputes Redressal Commission (NCDRC) cases also emphasize that product disclaimers cannot absolve manufacturers or sellers from defects or breaches of duty that endanger public safety.
While disclaimers generally don’t offer full protection in product liability cases, they may still be enforceable in certain circumstances:
Informed Consent: If the consumer is fully aware of the risks and the product is inherently dangerous, a disclaimer may be upheld, particularly if the consumer knowingly accepts the risk (e.g., using a product with specific safety hazards, like power tools or heavy machinery).
Exclusion of Liability for Certain Risks: In some cases, companies may use disclaimers to exclude liability for specific, foreseeable risks that do not result from manufacturing defects or negligence, as long as the disclaimer is clear and reasonable.
A company sells a lawnmower with a disclaimer stating, Not for use on wet grass. If a consumer ignores this warning and uses the product inappropriately, resulting in injury, the disclaimer may protect the company from liability, since the injury was caused by misuse, not a defect in the product.
A consumer purchases a toaster that causes a fire due to faulty wiring. The manufacturer included a disclaimer on the product, stating, The company is not liable for any accidents. However, because the injury was caused by a defective product and not by misuse, the disclaimer will likely be deemed unenforceable under Indian consumer protection laws, and the manufacturer could be held liable for the defect.
Disclaimers can offer some protection to companies from product liability, but they have significant limitations under Indian law. Disclaimers cannot absolve companies from liability in cases of negligence, gross negligence, or defective products. Indian courts prioritize consumer protection over contractual disclaimers, particularly when they involve the safety and well-being of consumers. While a company can limit its liability for certain risks, a disclaimer cannot override legal responsibilities under the Consumer Protection Act, 2019 and the Indian Contract Act, 1872, especially when a product is defectively designed or unsafe.
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