A real estate agent, while trying to sell a property, told a prospective buyer that the house had a 'new roof installed last year.' In truth, the roof had been replaced five years earlier. The buyer, believing the agent's statement, purchased the property and later discovered the actual age of the roof. The buyer sues the agent for misrepresentation. Which of the following will best determine whether the agent's statement constitutes actionable misrepresentation?
Whether the agent intentionally misled the buyer about the roof's age
Whether the buyer reasonably relied on the agent’s statement about the roof’s age
Whether the roof still met structural standards despite its age
Whether the agent was acting within the scope of their agency
To determine if there is actionable misrepresentation, it is essential to identify whether the statement was false, material (likely to influence a reasonable person’s decision-making), and if the buyer relied on it to their detriment. Statements of fact, rather than opinion, are more likely to be actionable. In this scenario, the statement about the roof’s installation date is factual and directly influenced the purchaser’s decision. Intentional or negligent misrepresentation can both result in liability. While the agent’s intent (knowingly false versus negligently false) is relevant, reliance and materiality of the statement are critical factors. Other choices may incorrectly focus on intent as the sole factor or rely on unrelated legal principles.
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What constitutes a material statement in a legal context?
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What does it mean for a buyer to reasonably rely on a statement?
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What is the difference between intentional and negligent misrepresentation?