If you buy or sell business assets in New Zealand, chances are you’ll come across “as is, where is” wording in a contract.
It can sound reassuring (or a bit scary) depending on which side of the deal you’re on. Sellers often see it as a clean way to limit risk. Buyers often worry it means “no rights, no comeback”.
In reality, an as is, where is clause can be helpful - but it’s not a magic shield. It won’t automatically protect you from everything, and it won’t necessarily wipe out all buyer protections either. The legal impact depends on the wording, the type of transaction, and the laws that still apply.
Below, we’ll break down what an as is, where is clause means in NZ, when it’s commonly used, what it does (and doesn’t) protect you from, and how to draft it properly so your contract matches what you think you agreed to.
What Is An “As Is, Where Is” Clause (And Why Do Businesses Use It)?
An as is, where is clause is a contract term that generally says the buyer accepts the goods or assets:
- “As is” - in their current condition (including defects, wear and tear, faults, or missing parts)
- “Where is” - in their current location/position (including access issues, removal requirements, or site constraints)
In plain terms, it’s trying to allocate risk: the seller is saying “what you see is what you get”, and the buyer is agreeing to take the item/asset with fewer guarantees.
From a small business perspective, these clauses often come up when you’re:
- selling second-hand equipment (e.g. coffee machines, refrigeration, vehicles, tools)
- buying or selling business assets as part of a handover or exit
- dealing with liquidation/insolvency sales
- entering certain property-related arrangements where the condition is uncertain
It’s also common to see as is, where is style wording combined with:
- limited warranties (e.g. “no warranties except title”)
- inspection/due diligence provisions
- exclusions of liability
- acknowledgments that the buyer has relied on their own inquiries
Because these clauses can seriously shift risk, they should never be treated as “standard boilerplate”. A few extra lines (or missing lines) can make a big difference.
When Is An “As Is Where Is” Clause Commonly Used In NZ Business Deals?
An as is, where is clause tends to show up in transactions where the seller doesn’t want to (or can’t) promise much about condition, performance, or compliance.
1) Buying Or Selling Business Assets
If you’re doing an asset purchase (rather than buying shares in a company), you might be buying specific items like equipment, stock, fit-out, customer lists, and intellectual property.
In that context, an as is, where is clause may be used to limit arguments later about whether an item was “fit for purpose” or in “working order” - but it needs to align with the rest of the deal structure (especially warranties and disclosure).
For formal transactions, it’s common to document the sale through an Asset Sale Agreement that sets out exactly what’s included, what condition is accepted, and what each party is responsible for before and after settlement.
2) Selling Second-Hand Goods Business-To-Business
Small businesses often sell used goods to other businesses (or buy used goods from other businesses). An as is, where is clause can be appropriate here - but you still want the contract to clearly state:
- what is being sold (with serial numbers or an equipment schedule where possible)
- whether the buyer has inspected or tested the goods
- who pays for removal, transport, disconnection, or installation
- the point in time when risk passes from seller to buyer
3) Commercial Leases And Premises Handover Scenarios
You may also see as is, where is wording around premises handovers, reinstatement obligations, or when taking over an existing site. Sometimes it pops up when a landlord is offering a premises “as presented” rather than upgrading or repairing.
If you’re negotiating lease terms or taking over premises, it’s worth getting the lease checked properly - an Commercial Lease Review can help you understand what you’re accepting (and what you might be on the hook for later).
4) Quick Sales, Distressed Sales, Or Time-Critical Transactions
Where a seller needs a fast sale (for example, business shutdowns or restructuring), an as is, where is clause is often used to reduce post-sale disputes.
But even when time is tight, you still want the paperwork to be clear - fast deals are exactly where misunderstandings happen.
What Does An “As Is Where Is” Clause Actually Do (And What Doesn’t It Do)?
This is the part many business owners get wrong: an as is, where is clause isn’t a universal “no liability” button.
It can help allocate risk about:
- physical condition of goods/assets
- unknown defects (to some extent)
- maintenance issues
- location/access and removal logistics
- the buyer’s expectations about upgrades or repairs
However, there are several important limits.
1) It Doesn’t Automatically Cancel All Legal Protections
Depending on the context, certain laws can still apply. For example:
- The Fair Trading Act 1986 can apply to misleading or deceptive conduct in trade (including things you say in ads, emails, negotiations, and disclosures).
- The Consumer Guarantees Act 1993 may apply where the buyer is acquiring goods or services “as a consumer”. Broadly, that can include individuals and (in some cases) businesses buying goods/services of a kind ordinarily acquired for personal, domestic or household use. In business-to-business deals, the CGA can sometimes be contracted out of, but only if the contract-out is in writing and the goods/services are acquired for business purposes.
So even if your contract says “as is, where is”, you still need to be careful about statements like “works perfectly”, “recently serviced”, “fully compliant”, or “no issues” unless you’re confident that’s true.
2) It Won’t Save You From Misrepresentation
If the buyer was induced to enter the contract based on incorrect statements (whether intentional or not), you can still face claims relating to misrepresentation.
In practice, this means an as is, where is clause shouldn’t be treated as permission to “stay quiet” about known issues. If you know about serious faults, missing parts, or non-compliance issues, you need to think carefully about disclosure and how the contract documents what the buyer has been told.
3) It May Not Be Enough If The Contract Is Otherwise Unclear
Contracts work as a whole. If one clause says “as is, where is” but another clause says the seller “warrants the equipment is in good working order”, you’ve created an inconsistency - and that’s when disputes (and expensive legal arguments) start.
If you’re unsure whether your contract is internally consistent, it’s worth stepping back and checking the fundamentals of what makes a contract legally binding and enforceable in NZ - clarity and certainty are a big part of reducing risk.
How “As Is Where Is” Interacts With Warranties, Guarantees, And Disclosure
Most disputes about an as is, where is clause come down to one question:
What did the buyer think they were getting - and what did the seller actually promise (or imply)?
Warranties vs “As Is Where Is”
A warranty is a promise in a contract about a fact or condition. For example:
- “The seller warrants it has good title to the assets.”
- “The seller warrants the equipment is operational.”
- “The seller warrants the assets comply with all applicable laws.”
An as is, where is clause often tries to limit warranties - but unless it is drafted clearly, you can end up with warranties still operating (or implied warranties being argued about).
If you’re dealing with warranties and exclusions, it helps to understand how warranties in NZ law work in practice - especially what can be excluded, what can’t, and how courts tend to interpret unclear drafting.
Contracting Out Of The Consumer Guarantees Act (When Relevant)
In some business-to-business sales, parties may agree to contract out of the Consumer Guarantees Act 1993. But this isn’t automatic, and it must be done properly in writing.
Importantly, an as is, where is clause by itself usually isn’t the same thing as contracting out of the CGA. If you want CGA protections excluded (where contracting-out is allowed), the contract should say so clearly and meet the CGA requirements.
Disclosure: Your Best Protection As A Seller
If you’re selling, disclosure is often the best practical way to reduce risk of claims later.
For example, instead of relying only on “as is, where is”, you might also include:
- a written list of known faults (e.g. “compressor intermittent; heater not functional”)
- service history (or a statement that service history is unknown)
- photos and inspection reports
- a buyer acknowledgment that they have inspected and are satisfied
This helps show the buyer knew what they were getting, which is exactly what an as is, where is clause is meant to achieve.
What Should You Include In An “As Is Where Is” Clause To Protect Your Business?
If you’re using an as is, where is clause in NZ, the wording should match the commercial deal and the real-world handover process.
Here are the key elements we usually recommend thinking through (whether you’re the buyer or seller).
1) Clearly Identify What Is Being Sold
Vague descriptions create disputes. Where possible, include a schedule listing:
- item descriptions (brand/model where relevant)
- quantity
- serial numbers
- included accessories/parts
This matters because “as is” won’t help if the buyer says “that item wasn’t included” or “parts were missing”. You want the contract to be crystal clear.
2) Condition Acknowledgments And Inspection Rights
A strong as is, where is clause often pairs with a buyer acknowledgment like:
- they have inspected (or had the opportunity to inspect)
- they accept the goods with all faults (known or unknown)
- they are not relying on any representations outside the written contract
From a buyer’s perspective, if you can’t inspect, you should consider negotiating:
- a condition report
- a short testing period
- a limited warranty for critical components
3) Risk And Title: When Do They Pass?
“Where is” also raises practical issues: what if the asset is damaged between signing and pickup? What if removal causes damage to the premises?
Your contract should specify:
- when risk passes (e.g. on payment, on collection, on delivery)
- who is responsible for insurance before and after that point
- when title/ownership passes
4) Removal, Access, And Site Responsibilities
This is where small businesses often get caught out.
If the item is “where is”, spell out:
- who disconnects and removes it (and at whose cost)
- what access hours apply
- who must reinstate the premises after removal
- health and safety responsibilities during removal (especially if machinery is involved)
5) Make Sure It Matches Your Broader Contract Terms
If the as is, where is clause is sitting inside (or alongside) your standard terms, the rest of your paperwork matters too.
Many businesses use written Business Terms to cover payment, delivery, risk, liability limits, and dispute processes. If you’re using as is, where is wording regularly, it’s worth making sure it’s consistent across quotes, invoices, and your master terms - so you’re not accidentally contradicting yourself.
Common Mistakes (And How To Avoid Disputes Over “As Is Where Is”)
Most problems with an as is, where is clause aren’t because the concept is bad - they happen because the deal wasn’t documented clearly, or someone assumed the clause did more than it actually does.
Mistake 1: Thinking “As Is Where Is” Covers Misleading Statements
If you (or your staff) have told the buyer something specific about condition, performance, or compliance, you need the written contract to reflect that accurately - or to clearly state what is and isn’t being promised.
As a practical step, make sure your sales process is consistent:
- train staff not to overpromise
- put key statements in writing (or remove them)
- keep records of disclosures and buyer questions
Mistake 2: Using A One-Line Clause With No Supporting Terms
A bare “as is, where is” line may not deal with the real issues: inspection, risk, removal, and timing.
If a dispute arises, both parties may argue about what the clause was intended to mean - and uncertainty is where legal costs blow out.
Mistake 3: Failing To Contract Out Properly (When You Think You Have)
Some sellers assume “as is, where is” automatically contracts out of all implied guarantees. That’s not always true.
If you’re relying on exclusion language, it needs to be drafted for your exact scenario and comply with the relevant legal rules (including what you can and can’t exclude in NZ).
Mistake 4: Not Doing Due Diligence As A Buyer
From the buyer’s side, “as is, where is” should trigger a simple mindset shift: don’t rely on hope - rely on checks.
Depending on what you’re buying, due diligence might include:
- inspection and testing
- confirming servicing history (where available)
- verifying ownership/title
- checking whether any third-party finance or security interests exist
- confirming the asset actually meets your intended use
If you’re buying assets critical to operations (e.g. production machinery), it can be worth building in a condition precedent or a short acceptance testing period, rather than relying on a handshake and a generic clause.
Key Takeaways
- An as is, where is clause generally means the buyer accepts assets in their current condition and current location, and the seller limits responsibility for defects and issues.
- In NZ, as is, where is wording is common in business asset sales, second-hand equipment transactions, and some premises/lease-related situations.
- An as is, where is clause is not a “catch-all” - it won’t automatically protect you from claims involving misleading conduct under the Fair Trading Act 1986 or issues like misrepresentation.
- The clause should be supported by clear contract terms around inspection, risk/title passing, removal logistics, and whether any warranties are given (or excluded).
- If you’re selling, clear disclosure and accurate written documents are often your best defence against post-sale disputes.
- If you’re buying, treat “as is, where is” as a signal to do proper due diligence and negotiate protections if the asset is business-critical.
Note: This article is general information only and isn’t legal advice. Because the enforceability of as is, where is clauses (and any attempt to exclude statutory rights) depends heavily on the facts and the drafting, it’s worth getting advice on your specific transaction.
If you’d like help reviewing or drafting a contract that includes as is, where is wording (or you’re buying/selling business assets and want to make sure the deal is properly documented), reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
