Is a seller relieved of all responsibility for defects if something is sold “as is?” Not always, according to a recent Saskatchewan small claims judgment.
In P vs. K, a mother and her 17-year-old son purchased a 17-year-old truck for $4,000. The handwritten sales receipt noted that the truck was being sold “as is.” The vehicle was not licensed so the purchasers did not test drive it. The seller indicated he had used the truck, that he was considering replacing the motor because of problems and pointed out rust on the body, but did not indicate there were any other problems.
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The purchasers obtained a temporary permit to drive the vehicle home. They bought gas and upon arriving home found that one of the two gas tanks was leaking. After taking the truck for a further drive it stalled and had to be boosted. They found the battery would not hold a charge and had to be replaced. After replacing the battery they continued to have problems, and after further examination found that the starter had to be replaced.
The buyers began a small claims action to cover the costs of the various repairs.
The judge noted that “even when a vehicle is sold ‘as is,’ that does not protect the vendor from liability in all circumstances.” She pointed out that in deciding whether the seller is liable, a court looks at the bargaining position of the parties, their experience, the opportunity to inspect the goods and the nature of the defects. The judge noted there were two types of defects: those that are obvious upon ordinary inspection and those not easily discoverable. A seller is not required to point out obvious defects that are easily noted. Thus if a used vehicle is being sold “as is” and has no tires, this is something that should be obvious to a purchaser.
In this case the judge said she was satisfied that the seller would have known that the gas tank leaked, that the starter needed replacing and that the battery would not hold a charge. The principal buyer was a 17-year-old boy who had not had the opportunity to drive the vehicle and the defects were not immediately obvious, the judge ruled.
Therefore, the judge concluded that the doctrine of buyer beware did not apply and that the term “as is” did not relieve the seller from liability. He was found liable in the amount of $450, which was the cost of the repairs.
This was a small claims judgment and not binding on other courts. However, it does illustrate the point that a seller must disclose all known defects in used goods. Selling something “as is” will not always be sufficient.
Don Purich is a former practising lawyer who is now involved in publishing, teaching and writing about legal issues. His columns are intended as general advice only. Individuals are encouraged to seek other opinions and/or personal counsel when dealing with legal matters.
