Buyer may sue seller for fraudulent failure to mention flooding problem despite "as is" clause in real estate sales contract

When real estate contracts contain an "as is" clause or state that the buyer is not relying on any oral statements made by the seller, some courts hold that the buyer cannot sue the seller for fraud even if the seller lied about the condition of the premises or failed to reveal material facts any reasonable buyer would want to know. But other courts allow claims for fraud on the ground that sellers cannot be allowed to immunize themselves from liability for fraud by contract language. In McNulty v. Chip, 116 A.3d 173 (R.I. 2015), buyers of a home experienced serious flooding within weeks of buying the place. Rather than an all-or-nothing solution, the Court held that the sales contract had not been worded specifically enough to protect the seller from a fraud claim. While the contract said that the property was being sold "as is," nothing specific was stated about flooding. Neither the "as is" clause nor the non-reliance clause (stating that neither party was relying on oral statements made by the other "as to the character or quality of the property"), was sufficiently specific to deny the buyer's right to protection from fraudulent statements about flooding.