What is an earnings disclaimer?

An earnings disclaimer is a document a business makes available to prospective consumers to let them know that, while the company’s products or services might have the potential to help a purchaser make or generate income, there is no guarantee or likelihood that such income generation will occur. Sometimes the disclaimer is included in business contracts, books, and website terms of use.

Why should your company disclaim earnings?

Any company that sells products or services that aim to produce wealth or generate income should protect itself from potential suits from customers who suffer losses despite or because of using such products or services.

Typical earnings disclaimer clauses you’ll see including the following.

1. A statement that the company is not providing a business opportunity, employment, or franchise to its customers.

2. A statement making clear that there is no guarantee customers will make money.

3. A clause stating that any financial success or losses will be the result of the client’s initiative and, as such, they will be solely responsible for both.

4. A statement that past successes of others using the company’s products or services are no guarantee of future success of any particular customer.

5. A statement that before starting any venture, prospective customers should do their research (perform due diligence) and decide if the endeavor in question is one in which they wish to embark.

A thorough and well-written disclaimer will serve to protect a company from litigation from disappointed customers and in many cases will protect the customers themselves by prompting them to do their homework and research any venture thoroughly before committing their time, money, and other resources.

Need help putting together your company’s disclaimer?

Do you need help creating your own earnings disclaimer? Internet lawyer Mike Young has been helping companies draft earnings disclaimers, health-related disclaimers, and other types of protective legal documents for more than 20 years. To get help, set up a confidential telephone consultation for legal advice today.