Introduction

Ever seen the term “as is” in a contract and wondered what it really means? In the world of business agreements, “as is” can be a simple but powerful phrase. It tells you that what you’re buying is exactly what you see—no more, no less. When something is sold “as is,” it means the seller is offering it in its current condition, with all its flaws, faults, or benefits, and is not making any promises about its quality or fitness for a specific purpose.

Let’s explore what “as is” really means, why it’s important in business contracts, and how it can impact your next deal.

Why is ”as is” important?

Understanding “as is” is crucial in business contracts because it limits the seller’s liability. When you agree to purchase something “as is,” you’re accepting the item or service with all its existing conditions, whether those are good, bad, or somewhere in between. This term is often used in sales of goods, property, or even entire businesses to clarify that the buyer takes on all the risks associated with the purchase.

Here’s why it matters:

1. Limits the seller’s responsibility: The seller isn’t responsible for any defects or issues that the buyer might discover after the sale. Essentially, the buyer is taking on the risk.

2. Reduces legal disputes: By making it clear that the item is sold “as is,” both parties understand that there are no guarantees or warranties, which can reduce potential for disputes or legal action later on.

3. Encourages due diligence: For buyers, the term “as is” is a signal to thoroughly inspect the item or service before committing to the purchase. You need to know exactly what you’re getting into.

Example of “as is” in a business context

Imagine you’re running a small manufacturing company and looking to purchase a piece of used equipment to increase production. The seller offers the equipment “as is,” without any warranties about its current state or how well it works. If you agree to these terms, you’re accepting the machine with all its existing issues, whether or not you know about them.

After the purchase, if the equipment breaks down or doesn’t perform as expected, the seller isn’t liable—you bought it “as is.” This makes it critical to thoroughly inspect and test the equipment beforehand or bring in an expert to evaluate its condition.

How understanding “as is” can help you

Knowing what “as is” means can help you make smarter business decisions. If you’re the buyer, it’s a reminder to perform due diligence before agreeing to the terms. If you’re the seller, using “as is” language can protect you from future claims or disputes about the condition of the item or service sold.

How Cobrief can help

Cobrief automates the review of business agreements in minutes for small to medium-sized businesses. Save time, cut legal costs, and sign your contracts with confidence.

Upload your contract to Cobrief's AI contract review software, click review, and you'll get it screened for risks in plain English, helping you decide if you want to sign, reject or negotiate the contract—or escalate it to a lawyer.

Conclusion

The term “as is” might look simple, but it carries a lot of weight in business contracts. It’s a way to set clear expectations about the condition of what's being sold and to manage the risks involved in a transaction. Whether you’re buying or selling, understanding “as is” can help protect your interests and keep your business dealings straightforward.

Next time you see “as is” in a contract, remember—it means what you see is what you get, with no promises or guarantees attached.