The term “as-is” comes from the law of warranty and is used to mean that the seller of an item has no liability for any defects it may have. The buyer who takes an item “as is” accepts the item in the condition it is in, even if it is defective, and the seller is released from all liability. This term signifies that the seller makes no written or verbal warranties to the buyer.
Rather, the seller disclaims any warranties and is not responsible for any deficiencies or defects in the item. If the buyer discovers that the item is defective and needs repairs, the buyer has to pay for those repairs out of their own pocket
Applying the phrase “as-is” to a product when it is sold does not necessarily relieve a seller of all possible liability. It is more complicated than that, as discussed as below. Also, “as is” does not release the seller from liability if the seller used misrepresentation or fraud to induce the sale.
What Kinds of Products Are Sold with This Disclaimer?
Any physical item can be sold as-is, although laws in some states regarding residential real estate and automobiles may limit “as-is” sales of those items. Some items that are commonly sold as-is in some states are:
- Garage sale and other second-hand items;
- Used cars;
- Damaged items;
- Art and craft items.
However, in some states, there are limitations on what can be sold as-is. Or, there are requirements for completing an as-is transaction in a legal manner. For example, in Maryland, while residential real estate is often listed as being sold as-is, in fact, under Maryland law, residential real estate cannot be sold as-is.
The law requires that the seller of residential property provide the buyer with a disclosure statement. The statement must disclose those features of a property that the State Real Estate Commission requires to be disclosed about the physical condition of the property.
For example, the disclosure form that a seller of residential real estate must give to the buyer must include a list of defects. Thes include latent defects, as well as information of which the seller has actual knowledge with respect to such features of the property as the following:
- Water and sewer systems;
- Structural systems, including the roof,
- Foundations, and any basement;
There is more. Virtually nothing that can affect the condition of residential real estate is excluded from the required disclosure form. This makes selling property in Maryland in an as-is condition impossible.
Most other states have laws that are comparable to those in Maryland, that is laws that require thorough disclosure of the condition of residential real estate when it is sold. A person who is thinking of trying to sell residential real estate in an as-is transaction should consult an experienced real estate lawyer to find out if such a transaction is possible in their state.
Another item that would be difficult to sell as-is would be a used car. In California, for example, there are requirements for selling a used car that mean in effect that one cannot sell a used car as-is.
For example, a transfer of title to the car must be filled out completely and correctly. If it is not complete, the vehicle’s record with the California Department of Motor Vehicles (DMV) would not be updated until the buyer applied for a new title. The owner who did not complete the transfer form could be held liable if their buyer were to be involved in an accident before that time, as the owner would still be the owner of record with the DMV.
In California, if the vehicle is over 8 years old, the seller must provide the buyer with proof of a current smog certification unless a smog certification was submitted to the DMV within the 90 days before the sale. (This is not required if the title to the vehicle is being transferred within a family.) A person could, of course, decide to flaunt the law and sell a car without a smog certification. However if the new owner then takes the car in to get a smog certification and it does not pass, the seller is responsible for repairing the car so it meets smog certification standards.
It is very unlikely that a car would be in a condition to qualify for a smog certification if it had any significant engine issue. So, essentially, a car has to be in good condition mechanically if the owner is to obtain a smog certification.
Still, in California, a private party can sell a used car as-is. A savvy buyer would have a used car checked out by their mechanic before they buy it, and get any representations as to the car’s condition made by the seller in writing before completing the purchase.
Other states may have other requirements in their law regarding the sale of residential real estate and used cars. A seller should consult the law in their state for the item they wish to sell before attempting to sell a major item on an as-is basis. Buyers should inform themselves of the law also.
In Pennsylvania, a car dealer has a duty to disclose information about the prior accident history of a used car and its prior use history as well, e.g. whether it was used as a rental car. So, even if a person bought a car “as-Is”, a dealership still has to disclose the car’s history. If the dealer does not comply with the law, the “as-Is” wording on sale documents do not prevent a buyer from suing the dealership for selling them a lemon in Pennsylvania
Does Product Liability Law Apply to “As Is” Products?
Product liability is the area of law that allows a person to get compensation for losses suffered because a product was defective. A manufacturer cannot avoid liability for defects by making disclaimers of liability or of implied or express warranties in documentation for its product. This would include representing any sale of the product as made on an as-is basis. These kinds of general disclaimers usually are not valid under the law of product liability.
Although manufacturers cannot so easily escape liability, sellers might escape liability by informing the customer before the purchase that a product must be taken “as-is,” meaning as the product was found when it was purchased in-store. “As-is” works for the seller because in theory the buyer has an opportunity to inspect the product and decide whether to buy it given its condition. However, many design or manufacturing defects are not so easily detected in a retail environment by the average buyer, so there is a counter argument.
These issues would depend on the law in the state in which the sale is made and the nature of the seller. If the seller is in the business of selling products of the kind at issue in a case, they may well not avoid liability by trying to sell the product as-is. If the seller is a private individual selling an item they used personally, the law might be different.
It is also possible that an “as is” product would be covered by a manufacturer’s warranty. For example, if a person were to buy a car with a transferable 10-year/100,000 mile warranty and it was only a year old with 2,000 miles on the odometer, then the car would most likely still be covered by the auto manufacturer’s warranty.
“As is” also does not relieve a seller from liability if the seller uses misrepresentation or fraud to induce the buyer to make the as-is purchase of an item. It also does not disclaim any express warranties that the seller makes in his or her description of the product. A product can be purchased “as is,” but if the product does not match the description that the seller gave to the buyer before the sale transaction, the buyer has the right to reject the product, return it and get their money back.
Do I Need a Lawyer?
As stated above, a seller may still be liable for harm that the product causes you even if you did buy the product “as is.” Contacting a consumer lawyer is the best way to figure out if you do have a case against the person who sold you a defective or dangerous product. A lawyer will be able to evaluate whether the seller acted wrongly in selling the product to you. And an experienced lawyer can determine whether the manufacturer of the product would still be liable on a theory of strict product liability. Of course, they can represent you in court if you should have to bring a lawsuit against either the manufacturer or the seller of the product.