The following clause is currently under discussion:
“The Buyer is aware, understands and agrees that all land, improvements and real and personal property will be sold, conveyed and/or assigned, as applicable, by the Seller to the Buyer in an “AS IS” condition without warranty or representation, express or implied, the Buyer hereby agreeing, acknowledging and affirming to the Seller that the Buyer has had full opportunity to inspect, and accepts all land, improvements and real and personal property in an “AS IS” condition. The Buyer understands and acknowledges that the Seller hereby expressly disclaims any and all warranties, whether expressed or implied, with respect to the land, improvements, and real and personal property, including without limitation, any warranty of habitability, warranty of merchantability, or warranty of fitness for a particular use. It is the Buyer’s intention to give up, waive, and relinquish all rights to assert any claim, demand, or lawsuit of any kind with respect to the condition of the land, the improvements, the real property, or the personal property. The Seller will not be required to make any repairs or pay any expenses concerning the land, the improvements, the real property, or the personal property.”
Let’s have a look at that particular property paragraph in more detail:
The Buyer is aware, understands and agrees
The word “agrees” is all that would be required. The rest is superfluous.
that all land, improvements and real and personal property will be sold, conveyed and/or assigned, as applicable,
There is no assignment in an Agreement of Purchase and Sale.
by the Seller to the Buyer in an “AS IS” condition
That’s the deal. That’s ALWAYS the deal. That point was made clear by the Supreme Court of Canada in 1979, in Fraser-Reid v. Droumsekas.
without warranty or representation, express or implied,
Again, that’s what the Court said.
the Buyer hereby agreeing, acknowledging and affirming to the Seller
Additional unnecessary, superfluous wording.
that the Buyer has had full opportunity to inspect, and accepts all land, improvements and real and personal property in an “AS IS” condition.
This provision is already in the standard form Agreement of Purchase and Sale as provided by OREA. The provision has been there for many years. This demonstrates a lack of familiarity with the Form by the person who drafted this clause.
The Buyer understands and acknowledges that
When you look at the next part of the sentence it would appear that Buyer and Seller have been reversed, likely simply by mistake.
This sentence should start off with the “Buyer”.
the Seller hereby expressly disclaims any and all warranties, whether expressed or implied, with respect to the land, improvements, and real and personal property, including without limitation, any warranty of habitability, warranty of merchantability, or warranty of fitness for a particular use.
Here, it should be the Buyer “disclaiming”, namely saying that “I am not receiving…”.
Again, according to the common law, there are no warranties UNLESS they are included in the Agreement IN WRITING.
It is the Buyer’s intention to give up, waive, and relinquish all rights to assert any claim, demand, or lawsuit of any kind with respect to the condition of the land, the improvements, the real property, or the personal property.
The “give up” expression is rather cavalier!
Never mind what the Buyer’s intention may be! Who cares! Does the Buyer actually agree at this point in time, that is, at the time of the contract? This part of the paragraph which would be the only effective provision is very poorly worded.
The Seller will not be required to make any repairs or pay any expenses concerning the land, the improvements, the real property, or the personal property.
Naturally, that is the case unless there was a specific obligation contained in the Agreement.
Comment
All in all, this was a poorly drafted clause which may have the effect of discouraging many potential Buyers from submitting Offers. Including this clause in Schedule “B” and insisting upon its inclusion in any Offers could have a very negative effect.
All the while, the paragraph adds “nothing” and its only provision which might possibly affect liability, is so poorly worded, that it is quite unlikely unenforceable.
Other than that, I think that the paragraph is fine!
Brian Madigan LL.B., Broker