How to Use an As-Is Contract When Selling a Car

by WadeH

Just as it sounds, the "as is" clause means the buyer takes the car as it is. You see that clause in ads when you look for a car and in most contracts for a car. A typical car contract might read "$75,000, new sporty prototype, as is." That means that if the car quits running the day after tomorrow, the buyer is out of luck. You can use it in an oral or written contract.

Avoid the common mistake that an "as is" clause protects the seller from tort liability. Understand that just because you put "as is" in the contract or say "as is," that does not mean the buyer loses in a lawsuit over a broken arm in a car accident.

Remember that an "as is" clause only protects you as a seller from a lawsuit based on the contract concept. Remember that it does not protect you from an injury suit if you are negligent and someone is injured in the car because of your wrong.

Anticipate that if the buyer sues you after the front bumper falls off, the buyer loses if he sues simply for return of the contract price. Anticipate that if the car has a pedal that sticks and you are negligent in selling it to the buyer, the injured buyer wins if he later sues for injuries suffered in a car crash that results from your negligence.

Remember the fraud exception to the rule. Know that you will lose even in a contract suit if the buyer can prove fraud. Avoid fraud, such as stating "I got this car from a little old lady in New York who only drove it on Sundays" if it's not true.

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