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DeAngelo v. Exxon Corporation

A-791-98T3 (N.J. Super. App. Div. 1999) (Unpublished)

CONTRACTS; DISCLAIMERS—Where a contract clearly and expressly denies a buyer the right to rely on reports furnished or representations made by its seller, even for environmental matters, an aggrieved buyer loses its fraud and contract claims because any reliance on the reports and representations is unreasonable.

The buyer of a former gasoline service station discovered that the former owner (and its consultant) had failed to remove six previously undiscovered tanks. The former owner, an oil company, then had those tanks removed, but this caused a five month delay in the buyer’s development of the property. The new owner then sought damages for that delay. The contract of sale for the property was replete with disclaimers by the oil company. It did “not make any representation or warranty whatsoever, . , including but not limited to, the accuracy or completeness of the [environmental] report. . Any reliance by you on the report, or any information therein shall be at your own risk. You should conduct your own investigation to determine the accuracy of the report and the condition of the property.” As additional environmental reports were sent to the buyer, they included similar disclaimers advising the buyer to rely only on its own investigation. In addition, the purchase contract provided that the oil company would not indemnify the buyer for “any damages or losses arising from loss of profits or business opportunity or any other special or consequential damages… .” Further, “Purchaser agrees that the Property is to be sold to and accepted by Purchaser ‘AS IS’ AND ‘WHERE IS,’ WITH ALL FAULTS, IF ANY, INCLUDING, WITHOUT LIMITATION, THE ENVIRONMENTAL CONDITION OF THE PROPERTY AND WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED.” Based upon all of these claims, the Court held that any reliance by the buyer on environmental reports furnished by the oil company was not justified. Consequently, the buyer was charged with the responsibility of making its own investigation even though the reports had indicated that all oil tanks had been removed prior to closing. Further, the disclaimer of liability for damages for lost profits would have barred the buyer from a successful action for damages against the oil company. As to a claim by the buyer that the contractual provisions did not preclude a claim for negligent misrepresentation, the Court said that, in the absence of fraud, the contractual terms were certainly broad enough to do so and no separate cause of action for negligent representation could be supported.


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