Wylene Sue Teer and Ross Teer v. Judith A. Johnston

Summary

The court affirmed summary judgment for Johnston, holding that the purchase agreement’s unqualified “as is” clause negated the Teers’ reliance on Johnston’s earlier disclosure that the property had no flooding problems. Because the property was used residential real estate, Alabama’s caveat-emptor rule applied, and the Teers’ fraud claim was therefore barred as a matter of law. The court declined to abandon that rule and overruled two earlier decisions to the extent they were inconsistent with it. Cobb, Chief Justice, dissenting, would have held that an “as is” clause should not shield a seller from liability for intentional fraud, particularly where ordinary inspection could not reveal the flooding condition.