An “as is” clause in a general purchase contract:
Correct Answer
B) covers only conditions disclosed or plainly visible and observable.
California stopped applying caveat emptor to residential sales decades ago. A seller and the seller's agent must disclose known material defects, and Civil Code §1102.1 makes the Transfer Disclosure Statement duty one the parties cannot waive, so an 'as is' clause cannot reach a known latent defect the buyer was never told about (Lingsch v. Savage (1963) 213 Cal.App.2d 729). What the clause does accomplish is to put the buyer on notice that no repairs will be made, as to conditions that were disclosed or that are visible and observable. That is the full reach of the clause.
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Related Topics & Key Terms
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Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
More Contracts Questions
A contract where one party uses threats to force the other party to sign is considered:
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