ContractsIntermediateAlaska Exam

An Alaska purchase agreement includes an 'as-is' clause. This provision means:

AThe seller has no obligation to disclose known defects
BThe buyer accepts the property in its current condition but the seller must still disclose known material defectsCorrect
CThe buyer waives the right to any inspection
DThe seller is completely protected from all post-closing claims, though outcomes can differ depending on circumstances

Why The buyer accepts the property in its current condition but the seller must still disclose known material defects Is Correct

Answer B: The buyer accepts the property in its current condition but the seller must still disclose known material defects

An 'as-is' clause requires the buyer to accept the property in its present condition but does NOT relieve the seller of the duty to disclose known material defects. Sellers must still disclose problems they are aware of — the 'as-is' clause shifts the risk of unknown conditions to the buyer.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

Key Contracts Terms in This Question

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