An “as is” clause in a general purchase contract:
Question & Answer
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applies only to matters of record.
Option A incorrectly limits the 'as is' clause to matters of record, such as liens or encumbrances; an 'as is' clause relates to the physical condition of the property, not recorded title matters, making this description factually inaccurate and legally unsupported.
applies only to things that have been properly disclosed or are visible and observable conditions.
Option B describes a limitation on the 'as is' clause that is actually a description of the disclosure duty — sellers must disclose known defects and agents must disclose observable conditions — but framing this as what the 'as is' clause 'applies to' mischaracterizes the clause's legal function; the clause applies to the buyer's acceptance of condition, not to the scope of disclosures.
is valid under the caveat emptor (“Let the buyer beware”) theory.
b. applies only to things that have been properly disclosed or are visible and observable conditions. c. is valid under the caveat emptor (“Let the buyer beware”) theory. d. invalidates the whole contract.
Option D is a compound answer that combines multiple options including an incorrect statement that the 'as is' clause 'invalidates the whole contract,' which has no basis in California contract law; an 'as is' clause is a standard, enforceable contract provision that does not render the entire agreement void or voidable.
Why is this correct?
California Civil Code § 1102 mandates that sellers of residential property complete a Transfer Disclosure Statement (TDS) regardless of any contractual 'as is' language, because the disclosure duty is statutory and cannot be waived by private agreement. The 'as is' clause is legally valid in that it transfers the property without a warranty of condition and signals the buyer accepts the property in its current state, but it does not eliminate the seller's obligation to disclose known material defects or the agent's duty to disclose observable conditions. Therefore, option C correctly captures that the clause is valid under caveat emptor principles while the other options incorrectly describe its scope or effect.
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