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38. For whom will the court find?
The buyer sued the seller for damages and/or rescission of the contract.
There is no applicable statute.
After receiving the deed, the buyer visited the residence for the first time and discovered termite infestation that had caused substantial damage. The seller had not known of the termites.
Both parties signed a contract that was silent concerning the condition of the residence except to note that the sale was «as is.» Two weeks later, the buyer sent the seller a check and the seller sent the buyer a warranty deed.
The owner of a residence advertised it for sale in various media. A buyer who lived in another state decided to purchase it. The buyer neither visited the residence prior to the purchase nor personally spoke with the seller. All of their communication was by mail. The buyer never asked the seller about the condition of the residence, nor did the seller say anything about it except to ask if the buyer wanted to inspect the property because he intended to sell it «as is.» The buyer did not inspect the residence because, as she told the seller, she was an experienced land buyer, and also because privately she felt that the seller, being relatively inexperienced in real estate matters, was selling the residence below its fair market value.
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A is incorrect. A court will enforce an «as is» clause in residential sales as long as there is no positive misrepresentation or fraudulent concealment, neither of which is present in these facts.
B is incorrect. A warranty deed provides protection for title issues, not issues of physical condition. Here, the buyer sued the seller based on the physical condition of the residence, and nothing in the facts suggests that there were any title defects.
D is incorrect. Under the merger doctrine, acceptance of the warranty deed extinguishes all contractual promises of the seller relating to the quality of title. Here, the suit is about the condition of the residence, not its title. The «as is» clause extinguishes claims based upon termites: the clause eliminates any contractual duty of the seller to deliver a residence free of termites or other physical defects. Therefore, the merger doctrine is irrelevant.