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Are you an auctioneer who’s selling property “AS IS” or “as is?” It likely makes a difference. Today, we discuss more on conspicuous disclaimers regarding fitness for a particular purpose and the UCC § 2-316.

Specifically, this state law recites the following, in part:

(2) Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that “There are no warranties which extend beyond the description on the face hereof.”

https://mikebrandlyauctioneer.wordpress.com/auction-treatise/%c2%a7-2-316-exclusion-or-modification-of-warranties/

As you can see here, such disclaimers of fitness need to be in writing and CONSPICUOUS. That might mean simply larger print, capital letters, colored, bold, italic, or similar extra emphasis. Attempting to disclaim fitness with the same size/style print might not accomplish the task at hand.

Of course, we’ve suggested such disclaimers regarding fitness for a particular purpose may — or may not — be effective given misrepresentation, concealment, or lack of opportunity to preview and/or if your implication was essentially an expression nonetheless.

Merchantability and fitness are very similar concepts. Merchantability is generally suitable for the typical buyer, where fitness for a particular use is more so specific to a single buyer’s needs. As an auctioneer you can attempt to disclaim all implied warranties (merchantability and fitness) with expressions noting “as is” and “where-is” and the like.

However, here are some important considerations and I’ll leave these as suggestions:

  1. Your “AS IS” statement should be conspicuous
  2. You should not misrepresent any property
  3. You should not conceal material information about any property
  4. You should allow for an opportunity to preview
  5. You should have any “AS IS” disclaimers in writing

Lastly, disclaimers concerning merchantability don’t have to be in writing, but disclaimers regarding fitness do. We would offer any — and all — legal disclaimers should be in writing and CONSPICUOUS. In this way, auctioneers insulate themselves as best they can from claims — that is, other than simply disclosing the truth about what is being sold.

Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.