Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd

In Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 161, 38 Tex. Sup. Ct. J. 366 (Tex. 1995), the supreme court approved the enforcement of "as is" clauses under certain circumstances. As long as the buyer is not induced by fraud into accepting the "as is" provision, the legal effect of the provision is to negate the causation element essential to recovery on claims associated with the physical condition of the property. Prudential, 896 S.W.2d at 161. As the court explained, contractual disavowal of reliance upon any representation is an important element of an arm's-length transaction and is binding unless set aside. Prudential, 896 S.W.2d at 161. Finally, an "as is" agreement negates the causation element essential to recovery on DTPA theories, fraud (excluding, of course, fraud in the inducement of the "as is" agreement), negligence, and breach of the duty of good faith and fair dealing. Id.