Legal Update 2020
Instructor: John Henderson
"Non-Reliance Clause" is Enforceable "As Far As It Goes"
Reperex, Inc. v. Coldwell Banker Commercial, 2018 UT 51, 428 P .3d 1082 (2019)
Supreme Court of Utah
Facts: The buyer and seller of a business were represented by a brokerage company acting as a dual agent. A non-reliance clause in the buyer’s agreement disclaimed reliance on any broker representations, disclaimed any verification by the property of any of the seller's representations and limited liability of broker to the buyer. The accountant for the seller provided financial information about the business to the buyer. Within a short period of time, the business failed. The buyer sued the broker for fraud, negligent misrepresentation and breach of fiduciary duty.
Issue: Is the "non-reliance clause" enforceable?
Held: Yes. The non-reliance clause simply disclaims any reliance by the buyer on the broker for the accuracy of the seller's representations and clarifies that the buyer must "look solely to the seller for relief" for seller's untrue representations. The clause is not barred by public policy and is enforceable.