Contesting Disclaimer-of-Reliance Clauses by Efficiency, Free Will, and Conscience: Staving Off Caveat Emptor

Mark Twain’s famous remark, “The report of my death was an exaggeration,” has become most apt in recent years as it pertains to the purported demise of the rule of caveat emptor in real estate transactions. An ancient maxim of law, caveat emptor puts a buyer on his guard to discover defects in things purchased, with no general duty by a seller to disclose defects of which he has knowledge. Despite the apparent abrogation of the concept by legislative and judicially-imposed- disclosure obligations, a new phenomenon has emerged that allows a seller of real property, or related real property services, to easily maneuver around the requirement of disclosure through strategic, rent-seeking conduct.