Did You Really Give Up Your Rights?

Question

Danny bought a brand-new apartment from a construction company. Soon after he moved in,
he discovered major problems (the rain leaks in, if you put on more than three lights at a
time, the electricity blows, etc.) He approaches the construction company. They draw his
attention to a clause in the contract that reads, "The purchaser hereby, foregoes any
right of claim against the vendor for whatever defects he may find in the apartment."
Does this clause really preclude any claims for defects in the purchase, or can Danny take
the construction company to Beis Din?


Answer

The Rambam writes (in Chapter 15 of the Laws of Selling, Paragraph 6) that
whoever makes a purchase can expect to receive goods that are free of any defect. If the
vendor made the sale conditional on the purchaser foregoing any rights to claim for
defects in the purchased item, this condition is deemed invalid. If a specific defect does
exist and the vendor asks the purchaser to accept this, he is considered to have waived
any right to make a claim for this defect. The rule is that one who is asked to forego his
rights must know exactly what he is foregoing. The Maggid Mishneh (ad loco)
explains that the Rambam derived his ruling from the laws of overcharging (ona’ah).
If a vendor sells an item on condition that the purchaser will not make any claim against
him for overcharging, such a condition is invalid. Even though a purchaser could forego
any overcharge, he must first be aware of what he is foregoing. This is only possible if
he is made aware of the extent of the overcharge (see Sema to Choshen Mishpot 227,
Note 37).

The same rule applies to defects in a purchased item. Even if the fault is only
discovered after some time, it still constitutes grounds for annulling the original sale
(as long as it can be shown that the fault was intrinsic to the purchased item) – see
Sema Note 16. Should the local custom be that if this type of fault is found the
vendor carries out a repair, the purchaser can be forced to accept such a repair and has
no right to insist on a refund. All transactions are made on the basis of local custom (Choshen
Mishpot
227:6). Should the vendor point out a particular fault to the purchaser and
the latter states that he still wishes to proceed with the deal, he is deemed to have
foregone his right to make a claim for this fault.

There is another reason for invalidating the above condition. There is a law that one
can not perform an act of acquisition on an item that has not yet come into existence.
Thus, a "kinyan" to forego a blemish that has not yet been discovered is
not valid. However, even though this clause of the contract is invalid, it does not render
the rest of the contract invalid. The Remo (209:4) writes that if one acquired an
item that was already in existence together with one that did not yet exist, the fact the
second part of the sale is invalid does not disqualify the first part.

THEREFORE, Danny can go ahead and claim against the construction company. The
clause precluding such claims is deemed invalid, since Danny was not made aware of exactly
what he was foregoing. However, if the company wishes to carry out a repair and this is
the usual way of dealing with such problems locally, he must accept such a repair. He can
not insist on a refund.