What Does As Is Mean for Merchantability?

As is meaning in a product sale

As-is wording generally tells the buyer that the goods are being sold in their existing condition and that the seller is attempting to place the risk of defects on the buyer.

Similar wording may include:

• With all faults
• No implied warranties
• Buyer accepts the product in its present condition
• Seller makes no warranty as to condition

The legal effect depends on the complete language and applicable law rather than the phrase alone.

How as-is language affects merchantability

UCC § 2-316 recognizes expressions such as as is and with all faults as possible methods of excluding implied warranties when the circumstances make that meaning clear.

When effective, the term may prevent the buyer from relying on the implied warranty that goods are merchantable.

Important questions include:

• Was the phrase displayed clearly?
• Was it provided before the buyer agreed?
• Was it part of the sales contract?
• Does state law permit as-is sales?
• Was another warranty supplied?

Does as is need to mention merchantability?

A conventional disclaimer of merchantability generally must mention merchantability under UCC § 2-316.

The section separately recognizes expressions such as as is or with all faults as language that can exclude implied warranties when used in appropriate circumstances.

The distinction means that the exact wording and method of disclaimer should be identified before evaluating its effect.

Must as-is language be conspicuous?

Clear presentation is important because the language is intended to call the buyer's attention to the exclusion of warranties.

Review whether the language appeared:

• Under a clear heading
• In readable type
• Near the buyer's signature
• On the product listing
• On a vehicle Buyers Guide
• Before payment or delivery

State statutes may impose their own formatting and disclosure requirements.

As-is language disclosed after purchase

A buyer may dispute as-is wording first delivered after payment, such as language inside a package, on a later invoice, or in a post-purchase email.

Relevant evidence includes:

• The product page viewed before purchase
• Checkout screenshots
• The signed agreement
• Order-confirmation timing
• Terms linked before payment
• Packaging received after the transaction

Contract-formation rules vary, so late disclosure should not be assumed automatically valid or invalid.

As-is used-car sales

Used-car dealers subject to the FTC Used Car Rule generally display a Buyers Guide showing whether the vehicle is offered with a dealer warranty or as is with no dealer warranty.

Vehicle buyers should preserve:

• The Buyers Guide
• The sales agreement
• Service-contract documents
• Dealer advertisements
• Inspection and diagnostic reports
• State-required disclosures

State law may restrict or prohibit as-is vehicle sales or provide other protections.

Written warranties and as-is language

A supplier that gives a written consumer-product warranty generally cannot disclaim implied warranties under federal law.

A transaction containing both an as-is clause and a written warranty therefore requires careful review.

Identify:

• Who issued the written warranty
• Who made the as-is sale
• Which product parts or systems are covered
• Whether the supplier is attempting to limit duration
• Whether state law permits the limitation

Service contracts and as-is sales

A service contract sold with an as-is product can affect implied- warranty rights under federal law.

Review:

• Whether the seller entered into the service contract
• When the contract was purchased
• Which systems it covers
• Whether another company is only the administrator
• Whether the sales agreement still claims all implied warranties are excluded

Do not treat a service contract as identical to a warranty. It is a separately purchased agreement with its own terms and provider.

As is vs no manufacturer warranty

A seller's as-is designation and the existence of a manufacturer warranty are separate questions.

A used product may be sold as is by the dealer while still having remaining manufacturer coverage, although transfer, eligibility, maintenance, territory, and prior damage may affect that coverage.

Confirm manufacturer coverage directly rather than relying only on the seller's statement.

As is does not necessarily erase express warranties

An express warranty may arise from a specific factual affirmation, product description, sample, model, or other promise that became part of the bargain.

Possible express promises include:

• The engine was replaced recently.
• The product has a stated capacity.
• The item contains a specified material.
• A component was tested and works.
• The product has never sustained stated damage.

An as-is clause may conflict with specific representations. The transaction and applicable law determine how those terms are reconciled.

As is and fraud or nondisclosure

As-is wording does not necessarily protect a seller that fraudulently misrepresents or unlawfully conceals a material fact.

Relevant evidence may include:

• False written statements
• Altered records
• Hidden damage
• Prior repair history
• Inspection findings
• Required disclosures

Fraud and disclosure standards vary by state and are separate from ordinary implied-warranty analysis.

As is and warranty of title

As-is language concerning product condition does not necessarily disclaim the seller's warranty that it has proper title and that the goods are transferred free from undisclosed security interests.

UCC § 2-312 contains separate rules concerning title and infringement warranties.

Ownership disputes, liens, stolen goods, and title defects should be analyzed separately from product condition.

Buyer inspection and as-is sales

Sellers may encourage buyers to inspect goods before an as-is sale.

Buyers should document:

• What inspection was permitted
• Whether testing was allowed
• Which areas were inaccessible
• Whether the seller refused an independent inspection
• Whether the defect was concealed

An ordinary inspection may reveal visible wear but not necessarily an internal, intermittent, or concealed defect.

As-is products sold online

Online as-is listings should be preserved before they are edited or removed.

Save:

• The complete listing
• Seller identity
• Condition description
• Photographs
• Return and warranty terms
• Messages with the seller
• Checkout disclosures

A marketplace's general policy may differ from the third-party seller's contractual obligations.

What rights may remain after an as-is sale?

Depending on the transaction and governing law, remaining issues may include:

• Express warranties
• Fraud or material misrepresentation
• Required disclosures
• Warranty of title
• Written manufacturer coverage
• Service-contract obligations
• Product recalls
• Product-liability and safety law
• State consumer-protection statutes

As-is sale review checklist

1. Locate the complete sales contract.
2. Find the exact as-is wording.
3. Determine when it was disclosed.
4. Review its prominence and placement.
5. Check state restrictions.
6. Identify every express promise.
7. Review written warranties and service contracts.
8. Preserve inspection and disclosure evidence.
9. Separate condition, title, fraud, and safety issues.

As is and merchantability: key takeaway

An effective as-is sale may exclude the implied warranty of merchantability, but the phrase does not automatically eliminate every possible obligation.

Review state law, timing, conspicuousness, written warranties, service contracts, express promises, disclosures, inspection rights, title, fraud, and product-safety issues separately.

Related merchantability guides

Frequently asked questions