Mr. Landau had a 12-year-old car for sale. Mr. Maimon inquired about it.
“The car is old but is in good mechanical condition,” Mr. Landau said. “The battery has to be replaced, which I’ll pay for.”
Mr. Maimon took the car for a test drive. “It drives fine,” he said. “You seem like an honest fellow, so I’ll rely on your word that the car is O.K.”
He paid Mr. Landau, who transferred title of the car “as is.”
The following day, Mr. Maimon took the car to his mechanic to replace the battery.
The mechanic quickly examined the car. “I’m sorry to say that the battery is not the only problem,” he said. “The alternator is faulty and must be replaced, and the radiator leaks slightly. It will cost $600 to fix these problems.”
Mr. Maimon called Mr. Landau. “I was just at the mechanic,” he said irately. “He told me that the alternator and radiator were also faulty. I’m not interested in making these repairs. I want to void the sale and get my money back!”
“But we already transferred title,” objected Mr. Landau. “You could have checked the car before you bought it. It was your choice not to check; you took the risk and forfeited your rights!”
“But you told me that the car was in good mechanical condition, other than the battery,” argued Mr. Maimon. “I relied on you!”
“I didn’t mislead you intentionally,” said Mr. Landau. “I was not aware of these problems. Anyway, the ‘as-is’ nature of the sale exempts me from any responsibility toward you!”
“I don’t accept that!” insisted Mr. Maimon. “The car is defective and the sale should be voided! Let’s ask Rabbi Dayan.”
“Agreed,” replied Mr. Landau.
The two came to Rabbi Dayan. “I relied on Mr. Landau and bought the car ‘as is,’ but it turned out defective,” said Mr. Maimon. “Is the sale void?”
“In truth, an ‘as is’ clause is not an absolute exemption in halachah,” replied Rabbi Dayan. “Shulchan Aruch cites Rambam (Hil. Mechirah 15:6) that even if the seller stipulates that the buyer should not have a claim of defective merchandise, the buyer still has a claim unless the seller specified the defect and the buyer forgoes it or states that he accepts any defect up to a certain amount, since one who forgoes has to know what he is forgoing, similar to ona’ah (overcharging)” (C.M. 232:7).
“The Tur links this ruling to Rambam’s opinion that one cannot obligate himself to an undetermined amount,” continued Rabbi Dayan. “He notes, though, that according to Rosh one can obligate himself — and, accordingly, can also forgo — an undetermined amount” (C.M. 207:21; 60:2).
“Whom does the Shulchan Aruch rule like?” asked Mr. Maimon.
“The Shulchan Aruch rules that one can obligate himself to an undetermined amount, like Rosh,” replied Rabbi Dayan. “Yet, regarding defective merchandise, he cites Rambam, that the buyer still has a claim. This is because defective merchandise is analogous to ona’ah, where many require specifying the approximate overcharge to eliminate a claim of ona’ah. Thus, Rosh might agree regarding defective merchandise” (C.M. 227:21; Darchei Moshe 232:1c; Sma 227:39; 232:16).
“Even so, if the defect can be repaired, the seller can pay for the repair and uphold the sale,” added Rabbi Dayan. “However, if the repair requires extensive change of parts, it is like a new item and the buyer can void the sale” (C.M. 232:5).
“But many sales contracts for houses and cars stipulate ‘as is’ to eliminate claims of hidden defects!” argued Mr. Landau.
“That is true,” acknowledged Rabbi Dayan. “Therefore, nowadays, such a clause is most often binding based on minhag ha’medinah (common commercial practice), so that the sale is valid. Furthermore, some maintain that even regarding ona’ah it is not necessary to state the approximate overcharge (Machaneh Ephraim, Ona’ah #14). Nonetheless, it is ethical that the seller consider compensating the buyer.”
This article is intended for learning purposes and not to be relied upon halacha l’maaseh. There are also issues of dina d’malchusa to consider in actual cases.
Rabbi Meir Orlian is a faculty member of the Business Halacha Institute, which is headed by HaRav Chaim Kohn, shlita, a noted dayan. For questions regarding business halacha issues, or to bring a BHI lecturer to your business or shul, please call the confidential hotline at 877-845-8455 or email email@example.com. To receive BHI’s free newsletter, Business Weekly, email to firstname.lastname@example.org.