A homeowner sold a house to a buyer, knowing that the foundation was unstable but not disclosing this fact. The buyer, unaware of the defect, completed the purchase. The buyer later discovered the unstable foundation. Which of the following additional facts would give the buyer the strongest basis for a claim of fraudulent misrepresentation?
The homeowner failed to take corrective action once the defect was discovered by the buyer.
The homeowner actively concealed the unstable foundation to mislead the buyer.
The buyer did not ask specific questions regarding the foundation's condition before closing the deal.
The buyer assumed the risk of defects by agreeing to purchase 'as-is.'
Fraudulent misrepresentation occurs when one party knowingly makes a false representation of a material fact to induce the other party into a contract. Active concealment of a material defect, such as an unstable foundation, is a form of fraudulent misrepresentation because it is an act intended to mislead. While mere silence (nondisclosure) can constitute fraud if the seller has a duty to disclose known latent defects , active concealment provides an even stronger basis for a claim. The buyer's failure to ask specific questions does not absolve a seller who actively conceals a defect. Similarly, an 'as-is' clause generally does not protect a seller from liability for fraudulent concealment or misrepresentation.
Ask Bash
Bash is our AI bot, trained to help you pass your exam. AI Generated Content may display inaccurate information, always double-check anything important.
What does 'fraudulent inducement' mean in a legal context?
Open an interactive chat with Bash
What constitutes 'active concealment' in terms of property defects?
Open an interactive chat with Bash
What is the seller's duty to disclose defects in a real estate transaction?