The Supreme Court of Wyoming has ruled that buyers who sign an "as is" purchase contract can not later claim fraud for alleged misrepresentations made after they signed the agreement.

Lynn and Charolette Hardin ("Sellers") decided to sell their home, as they were moving to another community. They listed it for sale with Robert Bole ("Listing Agent"), employed as a real estate salesperson by broker Scott Parker of Cowboy Realty. Marlin and Lisa Richardson ("Buyers") made an offer for the Sellers' home, which the Sellers accepted. The purchase and sale contract the parties signed stated that the Buyers were accepting the house "as is, where is." When they returned the executed contract to the Buyers, the Sellers sent the Buyers a completed property condition disclosure form; this was the first time the Buyers had received this form. On the property condition disclosure form, the Sellers checked "no" in response to a question about whether the foundation contained concealed cracks. The Buyers never had the property inspected, and the sales transaction closed.

After moving into the home, the Buyers noticed defects in the property's foundation. An engineer hired to examine the foundation stated that eventually the foundation would collapse because of the soil on which the house was built. The engineer also found caulking in the cracks behind the paneling and also noted that the basement floor was severely buckled. The Buyers filed a lawsuit against the Listing Agent and the Sellers, alleging fraudulent misrepresentation.

In their lawsuit, the Buyers argued that the Sellers and the Listing Agent actively concealed the condition of the foundation. Testimony at trial revealed that the Sellers had noticed one of the walls buckling after their original purchase of the home (they bought the home as new construction), but in 1984 they had covered the wall with a "rustic wood" frame so that the foundation was no longer visible. The Listing Agent, who was the next door neighboor of the Sellers, testified that he was aware that the Sellers' home had experienced settling problems more than ten years earlier. He had asked the Sellers about the settling problem when the property was listed for sale with his company, and the Sellers said they had experienced no further problems. One of the Buyers visited the home twice before an offer was made, but no statements were made by the Sellers at that time concerning the condition of their home. Following the contact execution, in addition to receiving the completed property condition disclosure form, one of the Sellers allegedly told the Buyers that they had never experienced any problems with the house. The Sellers and the Listing Agent filed a motion for summary judgment in their favor, which the trial court granted. The Buyers appealed.

 

On appeal, the Supreme Court of Wyoming affirmed the trial court. One of the elements for a fraudulent misrepresentation cause of action is that the party claiming the fraud must show that they relied on fraudulent statements to their detriment. Here, the court found that all of the testimony showed that the alleged fraudulent misrepresentations made by the Sellers did not occur until after the contract had been signed. The court found that since the Buyers could not have relied on any of these statements prior to entering into the contract, the Sellers could not be liable for fraudulent misrepresentation. Thus, the court affirmed the lower court's ruling in favor of the Sellers and the Listing Agent.

Richardson v. Hardin, 5 P.3d 793 (Wyo. 2000).