ContractsIntermediateArizona Exam

In Arizona, a contract to sell real property 'as is' where the seller conceals a known defect is:

AFully enforceable since the buyer accepted the as-is condition
BPotentially fraudulent—the 'as is' clause does not protect sellers who knowingly conceal defectsCorrect
CEnforceable only if the buyer had an inspection opportunity
DFully protected by the as-is clause

Why Potentially fraudulent—the 'as is' clause does not protect sellers who knowingly conceal defects Is Correct

Answer B: Potentially fraudulent—the 'as is' clause does not protect sellers who knowingly conceal defects

An 'as-is' clause does not shield a seller who knowingly conceals material defects. Fraudulent concealment of known defects can make the contract voidable and expose the seller to damages, regardless of the as-is language.

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.

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