Tammy and I once took our kids to an amusement park in Virginia called King’s Dominion. There was a section of undeveloped property that was kept in a natural state and surrounded by a high-wire fence.

Within the boundaries lived a number of exotic animals, including lions, zebras, water buffalo, giraffes, chimpanzees, and others. There was an attraction called “Lion Country Safari” and visitors could ride a monorail train through the property and see the animals close up and living like they do in the wild. We did it and even when we were close to the biggest lion, we felt no fear, because we were fully protected by the enclosed cars of the monorail.

Many auctioneers think they enjoy the safety of a similar shield in conducting auctions. They believe they don a coat of armor when they give the auction’s terms and announce that “everything will be offered ‘as is, with no warranties, either expressed or implied.” These auctioneers view this couplet as the magical means to gain absolute protection against claims that might otherwise arise from what they subsequently say and do about the lots.

They believe mouthing these words hands an auctioneer a “get out of jail free card” that fully immunizes him from liability no matter what. This is a terrific concept, except for one thing – “as is” doesn’t work that way – not even close.

An auctioneer wrote me to ask about the use and effect of the “as is” disclaimer of legal liability:

“I have a question that pertains to the term ‘as is,’ with no warranty expressed or implied. I handle mostly estate and collectible auctions. I know there are many reproductions of all types of antiques coming out of China and sometimes these get purchased by unknowing collectors. There are also many forgeries of autographed items. While I cannot be an expert on everything, I try to do some research before each auction and would never knowingly mislead anyone. 

“If a buyer wins an item sold ‘as is,’ such as a boxing glove signed by Muhammad Ali, and later an expert tells the buyer that the autograph is not genuine, does the buyer have any recourse against the auctioneer or seller? I have seen this issue many times and have asked other auctioneers about it and gotten different answers.”

Let’s start with what “as is” has historically meant. When a seller was offering something for sale and knew or suspected that the something had defects or problems, the seller would often state that the item was being sold “as is.” This is much like an English version of the Latin couplet, “caveat emptor.” This means, “let the buyer beware” – and so does “as is.”

“As is” is a caution telling buyers that they need to carefully inspect an item before buying it, because they will get exactly what the item is in its present condition. If it is broken into 10 pieces, the buyer will purchase all 10 pieces in the item’s fractured condition – not more and not less and this is all that the seller represents the buyer will get.

Sellers, including auctioneers, use “as is” in an effort to avoid legal responsibility for sales to buyers. Take the item that was broken into 10 pieces. If the buyer bought it and got all 10 pieces, that was what the buyer was entitled to receive and the seller and auctioneer would not be on the hook because the item didn’t work, was irreparable, was worthless, etc.

The buyer had been warned by the disclaimer and still purchased the piece, so the buyer was responsible for any loss suffered and the seller and auctioneer were not liable to the buyer.

The concept of “as is” narrowed in modern commercial law, or maybe it is more accurate to say it became better defined. The Uniform Commercial Code states in pertinent part, “(U)nless the circumstances indicate otherwise, all implied warranties are excluded by expressions like ‘as is’ … or other language that in common understanding calls the buyer’s attention to the exclusion of warranties (and) makes plain that there is no implied warranty….”

Despite the broad umbrella that many auctioneers think of “as is” being, all it actually does is disclaim implied warranties and nothing more. An implied warranty is one that, under certain circumstances, is implied by law to exist in a sale of property. The commercial law provides for an implied warranty of merchantability, as well as an implied warranty of fitness for a particular purpose for many goods that are sold. These warranties become part of these sales, because the statutory law says so. By invoking the “as is” disclaimer, an auctioneer can block the inclusion of these warranties in a sale and, thereby, nullify them.

Auctioneers get into trouble on this issue due to two factors. First, they like to talk (a lot!) and commonly do so in giving image-boosting descriptions of the lots to entice bidders to bid higher for them. Second, they hold amplified microphones which encourage them to give even more detailed descriptions of the lots. These stated descriptions become express warranties under commercial law. 

If an auctioneer says, “Look at this beautiful Chippendale table. It’s a fine period piece, solid mahogany, and one of the best examples I’ve ever seen.”

This auctioneer has given an express warranty to any buyer that encompasses four material facts: (a) the piece is Chippendale style; (b) it is a table; (c) it is an original piece made in Thomas Chippendale’s London shop; and (d) it was made of solid mahogany wood.

The extra flourishes of “beautiful” and “one of the best examples I’ve ever seen” are mere opinions and not facts and the law designates these to be permissible “sales talk” or “puffery” and no additional warranty is created.

An express warranty is not an implied warranty. Where an express warranty exists, it is stated by a seller or auctioneer, as the example above demonstrates.

The “as is” disclaimer has nothing to do with express warranties and is wholly ineffective at blunting them. An express warranty trumps the “as is disclaimer.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World.