Article

When “As Is” Doesn’t Mean “As Is”

March 2012, Auto Dealer Today - WebXclusive

by Thomas B. Hudson, Esq. - Also by this author


 As is. Two small words. Four letters. And everyone on the planet knows what “as is” means, right?

It means, “Here it is, dude. You take it like you find it. Life’s a series of risks, and this is another one. No guarantees, no warranties—nada, zip, zero. If something goes amiss, it’s on you, pal.” Everybody knows what it means.

Except when that’s not what it means. Consider, for example, a report of a recent lawsuit.

Fred James Williams bought a used car from Williams Chevrolet, Inc. that was financed by General Motors Acceptance Corporation. The salesman stated that the car had been inspected and had been found free of mechanical problems or deficiencies.

But Williams also signed a vehicle order that stated the vehicle was sold “as is” with no warranty. The car broke down when Williams was driving home.

The car was then repaired and inspected by another repair shop that identified several deficiencies that Williams claimed should have been identified by the selling dealer’s inspection. After those deficiencies were not repaired by the dealer, Williams sued the dealership and GMAC, alleging fraud, breach of warranty, violation of the Michigan Consumer Protection Act, and violation of the Magnuson-Moss Warranty Act.

The fraud and MCPA claims were based on the oral statement of the salesman. Williams and GMAC settled regarding his claims against GMAC.

The dealership moved for summary judgment. The trial court granted summary judgment on all claims because the dealership had disclaimed any warranty. The trial court determined that the fraud and MCPA claims failed because Williams’ reliance on the salesman’s statement was unreasonable due to the disclaimer.

Basically, the trial court said “as is” means “as is,” and it doesn’t matter what the sales guy said. Unhappy with this result, Williams appealed the decision to the Court of Appeals of Michigan.

The Michigan appellate court determined that the trial court erred on the fraud and MCPA claims, but not on the warranty and MMWA claims. The appellate court determined that the false oral statements made by the salesman did not contradict the written contract disclaiming any warranty and therefore, it was not necessarily unreasonable for Williams to rely on those statements. The warranty and MMWA claims were dismissed because they contradicted the warranty disclaimer in the written contract.

So, at least in this case, “as is” means “as is, plus whatever the salesman tells you.”

Vol. 9, Issue 1
 

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