“As Is” Contract

"As Is" Contract

“As Is” Contract

For business owners, contract disputes can cost both time and money. When there are disputes over each party’s rights and responsibilities under the formal agreement, a qualified attorney can be an unparalleled aid in resolving the issue without resorting to an expensive lawsuit.

An “as is” contract states that a specific product is sold in its current state. The seller makes no claims or assurances about the product’s performance, and the customer agrees to accept the product “as is.” What’s referred to as mutual mistake is a typical problem in “as is” contracts. As no party inspects nor warrants the state of the goods, the product may turn out to be either much more or less valuable than either party expected.

Mutual Mistake Doctrine and Avoiding Contracts

A mutual mistake “goes to the heart” of the contract that was to be created, so the contract can be voided when it occurs. When a mutual mistake occurs, the contract can be voided. And so, a court may refuse to enforce an agreement if both parties misinterpret the nature. When a  business owner signs an “as is” contract, the seller usually tries to make the transaction irreversible. The fact that a product was sold “as is” does not exclude the contract from being avoided.

A mutual mistake calls into question which party in the contract bears the risk of loss. Written contract stipulations may limit a buyer’s right to use the mutual mistake defense. This includes if the buyer agreed to accept any conditions discovered after the sale was completed. Declaring the contract as inadmissible may be a preventable action by customary business practices. For example, if an appliance buyer does not regularly inspect their machines, they may lose the right to claim a mutual mistake.

There are different ways to approach the resolution of a mutual mistake. If a party wishes to void the contract, they can take the matter to court. However, lawsuits are expensive, time-consuming, and unpredictable. Negotiating the situation without the involvement of a court is usually much easier and more beneficial for each party. An attorney can assist in a resolution by facilitating the return of goods and helping the other party to understand that the contract is unenforceable, allowing everyone to move on.


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