17. A licensee represents the seller of a commercial property. The licensee tells the buyer a new highway exit ramp will be built within six months to give access to the property, although the licensee knows that is only one of several possibilities being considered by local planners. The exit ramp is subsequently located elsewhere. Could the licensee be liable to the buyer for the statement about the ramp?
Answer: D
Yes, the statement was a material misrepresentation.
The licensee could indeed be liable to the buyer for the statement about the ramp, as it constitutes a material misrepresentation. The licensee knowingly conveyed misleading information about the future construction of the exit ramp, which was not just an opinion but a factual assertion that the buyer relied upon.
A) No, the statement was the licensee's opinion.
This option is incorrect because the statement made by the licensee was not merely an opinion; it was presented as a fact about the future construction of the exit ramp. An opinion would not hold the same weight in terms of liability as a factual misrepresentation, especially when it is known to be untrue.
B) No, the licensee cannot be held liable for the planners' decision.
While it is true that the licensee cannot control the planners' decision, this does not excuse the licensee's responsibility for providing false information. The liability arises from the licensee's representation of the situation, which was misleading regardless of external decisions.
C) Yes, the statement was unjustifiable puffing.
This option is incorrect because "puffing" refers to exaggerated statements that are subjective and not meant to be taken literally. In this case, the licensee made a specific claim about a planned construction project, which goes beyond mere puffery and enters the realm of material misrepresentation.
D) Yes, the statement was a material misrepresentation.
This is the correct answer since the licensee presented a specific assertion about the construction of the exit ramp that was knowingly false. This misrepresentation is material because it directly influenced the buyer's decision-making process regarding the property.
Conclusion
The licensee's statement about the exit ramp was a material misrepresentation because it was a false assertion presented as fact, which the buyer relied upon. All other options fail to recognize the significance of the licensee's responsibility for knowingly providing misleading information, thus confirming the liability in this scenario.