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Parker v. Groff

A-1240-03T3 (N.J. Super. App. Div. 2004) (Unpublished)

CONTRACTS; “AS-IS”; UCC—An “AS-IS” clause excludes all implied warranties under Article 2 of the UCC, but doesn’t override an affirmative representation as to the condition of the goods being sold.

A contract of sale for a tow truck provided that the truck was to be sold “As Is.” After the sale, the buyer couldn’t start the truck and discovered that the truck was inoperable. It refused to make any more payments for the truck and the seller sued for breach of contract. The buyer filed a counterclaim for misrepresentation and for violation of the Consumer Fraud Act, arguing that although he accepted the truck “As Is,” the seller had misrepresented to him that a 1994 engine had been installed in the truck. The buyer testified that he was informed by an automobile parts dealer that the truck actually contained an inoperative 1984 engine. In response, the seller argued that because the buyer accepted the truck “As Is,” it therefore should be ordered to continue making payments.

The lower court concluded that the seller did not breach the sales contract, holding that the “As Is” clause excluded all implied warranties under Article 2 of the Uniform Commercial Code. It also dismissed the buyer’s counterclaim for violation of the Consumer Fraud Act because the seller was not in the business of selling vehicles. On the other hand, the lower court ruled that the seller misrepresented the year and condition of the engine. Therefore, it gave the buyer a credit for the cost of making the engine operable, but ordered the buyer to continue making the installment payments. The seller appealed, arguing that because the contract stated that the sale of the truck was “As Is,” the buyer should not have received a credit for the cost of making the engine operable.

The Appellate Division affirmed the lower court’s liability determination, finding sufficient credible evidence in the record to establish that the seller misrepresented the condition of the engine intending for the buyer to rely on the misrepresentation, and, in fact, that the buyer had so relied. There was also enough evidence in the record for the lower court to conclude that the engine was an inoperable 1984 engine and not a working 1994 engine.

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