Tennessee law regarding 'as-is' sales:
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Eliminates all seller obligations
An 'as-is' clause does not eliminate all seller obligations — it primarily shifts the burden of discovering unknown defects to the buyer through inspection, but the seller's duty to disclose known material defects remains fully intact under Tennessee law and cannot be waived by contract language.
Does not eliminate duty to disclose known material defects
Is prohibited
'As-is' sales are not prohibited in Tennessee; they are a common and legally recognized contractual arrangement used frequently in foreclosure sales, estate sales, and transactions involving distressed properties where the seller lacks full knowledge of the property's condition.
Only applies to commercial property
Tennessee's disclosure requirements under TCA Section 66-5-202 apply specifically to residential property transactions, not exclusively to commercial property, making this option factually incorrect and contrary to the statute's plain language.
Why is this correct?
Under Tennessee Code Annotated Section 66-5-202, sellers of residential real property are required to disclose known material defects to buyers, and this statutory obligation is not extinguished by an 'as-is' clause in the purchase contract. Tennessee courts have consistently held that an 'as-is' clause protects sellers from claims arising from unknown defects that a buyer could have discovered through reasonable inspection, but it does not insulate sellers from liability for knowingly concealing or failing to disclose material defects. This distinction reflects the principle that parties cannot contract around fraud or intentional concealment.
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