SW Legal studies in Business

Buyer Beware Applies to Vehicles Bought from the Government

Appeals court held that the government had no obligation to find and remove all illegal drugs inside a car the government seized from drug smugglers. When a buyer of the car was later imprisoned when the drugs were discovered, the buyer could not sue because the car was sold "as is."

Topic Sales
Key Words

Breach of Warranty; Drugs; Prison

C A S E   S U M M A R Y

Agredano attended a Customs auction of forfeited vehicles in 2001. He signed an agreement that he took the car "as is" with no warranty. He bought a 1987 Nissan that had been seized when it was used to transport marijuana from Mexico into the U.S. In 2002, Agredano was in Mexico traveling in the car. He was stopped at a checkpoint, and the car was searched. Marijuana was discovered stashed in the car. It was there from before Agredano bought the car; the Customs agents had not discovered it when the car was seized. Agredano spent a year in prison in Mexico before he convinced an appeals court that the drugs were not his. He then sued the U.S. government for breach of warranty in the sale of the Nissan, arguing that there was an implied-in-fact warranty that the car would be free of illegal drugs. The Court of Federal Claims entered judgment for Agredano. The government appealed.


Reversed. The responsibility of Customs to remove drugs from forfeited vehicles does not provide a contractual warranty to future purchases of the vehicles that it has done so. The failure to adequately perform this responsibility does not provide a contractual remedy. The car was clearly sold "as is" and the buyer knew it had been used to smuggle goods. All warranties had been clearly disclaimed.

Citation Agredano v. U.S., ---F.3d--- (2010 WL 537160, Fed. Cir., 2010)

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