This clause says the other party is NOT promising that the IP they're giving you is actually theirs to give, or that it doesn't infringe anyone else's rights. A warranty is a legal promise; a disclaimer removes that promise. This matters because if you use their IP and it turns out they stole it from someone else, you could be sued for infringement—and the disclaimer means they won't help pay your legal costs. For example, if a software vendor gives you code that actually belongs to another company, and you get sued, the disclaimer leaves you holding the bill. In the US and UK, courts generally enforce these disclaimers, so you have little legal recourse.
If the other party is a reputable, established company, you may accept a limited disclaimer. But if they're a startup or unknown entity, push back hard: require them to warrant that the IP is theirs and doesn't infringe, and require them to indemnify (pay for) any infringement claims. At minimum, get them to represent that they have the right to license what they're giving you. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause says the other party is NOT promising that the IP they're giving you is actually theirs to give, or that it doesn't infringe anyone else's rights.
Why should I care about this clause?
A warranty is a legal promise; a disclaimer removes that promise.
What are my options?
This matters because if you use their IP and it turns out they stole it from someone else, you could be sued for infringement—and the disclaimer means they won't help pay your legal costs.
How does this affect small businesses?
For example, if a software vendor gives you code that actually belongs to another company, and you get sued, the disclaimer leaves you holding the bill.