AS IS Again and Again: As Is in a form contract probably has no effect
Reading Prudential v. Jefferson, 896 S.W.2d 156 (Tex. 1995) in detail reveals that the Supreme Court found that the specific "as is" clause in that contract was effective because it was negotiated between the parties. Prudential v. Jefferson, 896 S.W.2d 156 (Tex. 1995) was a commercial case with sophisticated commercial real estate parties.
That fact alone should distinguish that case from being used in the everyday residential real estate sale but the defense attorneys for the real estate industry have disregarded that reality and convinced trial judges as well as appellate courts to ignore the text of the case and simply focus on the ready made language that seems so powerful in their defense. But just as the "as is" can not stand in a residential case because of the dozens of representations of "value and condition", the fact that the residential sale in Texas uses the TREC form 20-13, a boilerplate contract with fill in the blanks means that the One to Four Residential Contract for Sale (Resale), TREC Form 20-13, is precluded from being used as an "as is" contract.
We think it too obvious for argument that an "as is" agreement freely negotiated by similarly sophisticated parties as part of the bargain in an arm's-length transaction has a different effect than a provision in a standard form contract which cannot be negotiated and cannot serve as the basis of the parties' bargain.
Prudential v. Jefferson, 896 S.W.2d 156, at 162 (Tex. 1995). Look at that language: We think it too obvious for argument... the Supreme Court is clear and lucid that "...a standard form contract which cannot be negotiated and cannot serve as the basis of the parties' bargain." cannot be used as an "as is" bar and defense. And yet, all across the state of Texas, the defense lawyers for the real estate industry regularly and routinely argue that the "as is" clause in the One to Four Residential Contract for Sale (Resale), TREC Form 20-13 bars claims by buyers when they have discovered after the closing that the seller made misrepresentations of fact or that the realtor did or that they both did.
Lawyers are bound ethically to represent cases and caselaw honestly and fairly. A lawyer can be zealous about the law and advocate for its change. But the misues of Prudential v. Jefferson, 896 S.W.2d 156 (Tex. 1995) are rampant in the district courts of Texas and consumers are paying for that dishonest use of "as is".
The Texas Real Estate Commission continues to pretend to serve consumers but the pretense is revealed in their attempt to keep every home buyer in Texas from having a legal remedy against a dishonest seller, real estate agent or broker. This is shameful and it falls on the Texas Real Estate Commission, the lawyers on the lawyer broker committee and the lawyers that misuse the "as is" clause against homebuyers in Texas district courts.