Contract Law: “As Is” Clause

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Many contracts state that goods or property is being sold “as is”.

According to Black’s Law Dictionary, such a clause means “that goods are sold with all existing faults.”

The “as is” clause is permitted in Massachusetts by M.G.L. c. 106, Sec. 2-316.

Nevertheless, the courts have ruled that, “this section does not appear to preclude claims based on fraud or other deceptive conduct.”  S.H. Realty, Inc. v. Texaco, Inc., 757 F.2d 411 (1st Cir. 1985).

According to the Supreme Judicial Court:

The same policy that in general sanctions the avoidance of a promise obtained by deceit strikes down all attempts to circumvent the policy by means of contractual devices.  In the realm of fact it is entirely possible for a party knowingly to agree that no representations have been made to him, while at the same time believing and relying upon representations which in fact have been made and in fact are false but for which he would not have made the agreement. Bates v. Southgate, 308 Mass. 170, 182 (1941).

If you have any questions about contract law, please feel free to contact me at justin@jrmccarthy.com

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