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Contract Language Calling For Sale “As Is” Prevails Over Airworthiness Provision When Prepurchase Inspection Fails To Note Condition Compromising Airworthiness

The aircraft buyer in McMahan Jets, LLC v. Roadlink Transportation, Inc. discovered that a contract term calling for delivery of the aircraft “in airworthy condition” was not sufficient to protect it from aircraft discrepancies found after the buyer’s prepurchase inspection and acceptance of the aircraft. The U.S. District Court for the Western District of Tennessee found that the buyer’s right to conduct a prepurchase inspection, coupled with contract language providing for the buyer to accept the aircraft “as is,” placed the burden on the buyer to identify airworthiness problems before accepting the aircraft. When the buyer missed a condition later determined to compromise the plane’s airworthiness, the court held that the buyer was nonetheless bound by its post-inspection acceptance of the aircraft “as is.” The court found that, to the extent the contract language calling for delivery “in airworthy condition” conflicted with the disclaimer provisions, the disclaimers should control.

Not only did the buyer fail in its claim for breach of contract, but also on its tort theory of negligent misrepresentation based on a logbook entry concerning airworthiness. The court held that the buyer’s agreement to accept the aircraft “as is” negated any reasonable reliance on the logbook entry. Since reasonable reliance is an element of a negligent misrepresentation claim, the court entered judgment against the hapless buyer on this claim as well.