Schneider v. Miller
597 N.E.2d 175 (1991)
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Rule of Law:
When a buyer purchases goods 'as is' and has an opportunity to inspect them before the sale, the buyer assumes the entire risk as to the quality of the goods, and all implied warranties are excluded. The buyer generally cannot later revoke acceptance due to defects that a reasonable inspection would have revealed.
Facts:
- On August 20, 1988, R. Larry Schneider went to Harold Robert Miller's used car lot to look at a 1966 Chevrolet Impala SS.
- Schneider test-drove the vehicle and Miller disclosed that the brakes needed replacement, the trunk was rusted, and the engine might eventually need to be rebuilt.
- Schneider, who owned another 1966 Impala and had experienced rust problems with it, negotiated a purchase price of $2,580.
- On August 21, 1988, Schneider paid the balance and signed a bill of sale and a separate document, both of which clearly stated the vehicle was sold 'as is' with no warranty.
- Within a couple of days, Schneider took the car to a repair shop where it was discovered that the frame was so severely rusted that the car was unsafe, unrepairable, and a 'death trap.'
- On September 8, 1988, Schneider wrote to Miller seeking to rescind the contract and return the car for a full refund, which Miller refused.
Procedural Posture:
- Plaintiff R. Larry Schneider filed suit against defendant Harold Robert Miller in the Findlay Municipal Court (trial court).
- The claims included breach of warranty, fraud, deceit, rescission of contract, and violation of the Ohio Consumer Sales Practices Act.
- Following a bench trial, the trial court entered judgment in favor of the defendant, Miller.
- Schneider, as the appellant, appealed the judgment to the reviewing Court of Appeals.
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Issue:
Does the sale of a used car with an explicit 'as is' clause, where the buyer had an opportunity to inspect the vehicle, prevent the buyer from later revoking acceptance under Ohio Rev. Code § 1302.66 due to a subsequently discovered major defect?
Opinions:
Majority - Thomas F. Bryant
No. The sale of the used car with an explicit 'as is' disclaimer, coupled with the buyer's opportunity for inspection, bars the buyer from revoking acceptance. The doctrine of 'caveat emptor,' or 'buyer beware,' applies. The court reasoned that under Ohio Rev. Code § 1302.29 (UCC § 2-316), expressions like 'as is' effectively exclude all implied warranties, placing the entire risk as to the quality of the goods on the buyer. Schneider did not meet the requirements for revocation under § 1302.66 because his acceptance was not induced by the difficulty of discovery or by the seller's assurances; he had every opportunity to have the car inspected by a mechanic before purchase but chose not to. Furthermore, the court found no evidence of fraud or misrepresentation, as Miller had disclosed several known defects and there was no proof he knew about the rusted frame.
Analysis:
This decision strongly affirms the power of 'as is' disclaimers in contracts for the sale of used goods under the Uniform Commercial Code. It clarifies that such clauses are not mere formalities but serve to shift the risk of unknown defects entirely to the buyer, provided the buyer has an opportunity to inspect the goods. The ruling significantly limits a buyer's ability to revoke acceptance, reinforcing the principle of caveat emptor in consumer transactions involving used products. Future cases will likely cite this decision to defeat claims based on implied warranties or difficult-to-discover defects when a clear 'as is' provision is part of the agreement.
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