84. 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 be liable to the buyer for the statement about the ramp because it constitutes a material misrepresentation. The licensee knowingly provided false information about a significant factor that could influence the buyer's decision.
A) No, the statement was the licensee's opinion.
This option is incorrect because the statement made by the licensee was presented as a fact rather than an opinion. Misrepresenting factual information, especially regarding a material aspect of the property, can lead to liability.
B) No, the licensee cannot be held liable for the planners' decision.
While it is true that the planners' decision ultimately determines the location of the ramp, the licensee's liability arises from misleading the buyer with unverified information. The licensee's knowledge of the uncertainty surrounding the ramp's construction makes this option incorrect.
C) Yes, the statement was unjustifiable puffing.
This option is inaccurate because "unjustifiable puffing" refers to exaggerated statements that are subjective and generally accepted in sales. The licensee's claim about the ramp was a specific assertion of fact that was not merely puffery but a misrepresentation of material information.
D) Yes, the statement was a material misrepresentation.
This option is correct as it highlights that the licensee knowingly misrepresented a significant fact regarding the property. Since the buyer relied on this incorrect information when making their decision, the licensee can be held liable.
Conclusion
The correct answer, D, emphasizes that the licensee's statement constituted a material misrepresentation that misled the buyer. Options A, B, and C fail to recognize the seriousness of providing false information about a fact that could affect the buyer's decision-making process. Thus, the licensee's liability is grounded in the misrepresentation of critical information.