“As is” and no Warranty Provisions in Contracts: Are They Always Enforceable?
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Whether purchasing a business, a piece of real property, or even a car, there is likely a lengthy contract that goes along with that purchase. Many of those contracts contain “as-is” or “no warranty” provisions. These types of provisions may also include language that the seller of the property is not responsible for oral statements associated with that property.
While these as-is and no warranty provisions may be prudent to include in some contracts, they are not always enforceable. The case of White v. Ferco Motors Corp. illustrates the fine line.
In White, the plaintiff signed a contract with a car dealer for the purchase of a used car. That contract contained a warranty statement that provided “We are selling this Vehicle to you As-Is.” The contract also provided that “[t]he dealer assumes no responsibility for any repairs regardless of any oral statements about this vehicle,” and the dealer assumed no responsibility for the history of the vehicle. The contract also provided that the purchaser hold harmless, or in other words, release the dealer for any claims or lawsuits now or in the future.
In connection with the car purchase, the dealer charged the purchaser an inspection fee and service charge, and informed him the oil was changed and the car was mechanically sound. Shortly after purchasing the vehicle, the engine block was irreparably blown from a lack of oil in the engine.
As a result, the purchaser sued the dealer on various theories, including a claim under the Florida Deceptive and Unfair Trade Practices Act. In response, the dealer moved for summary judgment, arguing the claims were barred because of the contractual language cited above.
While the trial court granted the dealer’s motion for summary judgment, the appellate court disagreed. In doing so, the Florida appellate court stated:
Though White signed an agreement that he was accepting purchase of the vehicle “As-Is” and agreed that he could not rely on oral promises, the facts of this case, considered in light of the mechanic’s affidavit, the charge made by the dealership for inspection, and the condition of the vehicle, i.e., disconnected fuses, present the existence of a genuine issue of material fact.
The appellate court also noted that Florida’s Deceptive and Unfair Trade Practices Act and fraud statutes exist to protect purchasers against sellers, even when there is a signed contract containing as-is and no warranty provisions that relieve the seller of any further obligations.
The holding in White demonstrates that, regardless of the language of a contract, an individual cannot waive the protection of a statute. Contractual provisions that fall in that category are contrary to public policy and unenforceable.
Therefore, even if your contract contains an as-is or no warranty provision, all is not lost. Moreover, if you are including these types of provisions in your contracts, it is possible a court will find them unenforceable.
For more information about the Florida statutory consumer protection, as well as the enforceability limits on contractual language for real property, read these blog articles: