90. 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. By stating that a new highway exit ramp would be built within six months while knowing that it was only one of several possibilities, the licensee misled the buyer regarding a critical aspect that could influence their purchasing decision.
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 but a concrete assertion regarding a specific development. The licensee presented it as a fact, which would reasonably be expected to influence the buyer's decision, thus moving beyond opinion into the realm of misrepresentation.
B) No, the licensee cannot be held liable for the planners' decision
This choice is also incorrect. Liability arises not from the planners' eventual decision but from the licensee's misleading statement. The licensee's knowledge of the uncertainty surrounding the ramp's construction makes them accountable for the misinformation provided, regardless of the planners' actions.
C) Yes, the statement was unjustifiable puffing
While this option suggests that the statement was an exaggerated claim, it does not fully capture the seriousness of the situation. Unjustifiable puffing typically involves vague sales talk that does not mislead in a material way, whereas the licensee's statement was a specific claim that could lead to a buyer's reliance, thus qualifying as a material misrepresentation.
D) Yes, the statement was a material misrepresentation
This is the correct response as it accurately reflects the nature of the licensee's statement. Given that the licensee was aware of the uncertain status of the ramp, their statement misled the buyer about a significant factor influencing the property’s value and accessibility, which constitutes a material misrepresentation.
Conclusion
In this case, the licensee's claim about the new highway exit ramp was a specific statement that misled the buyer, making it a material misrepresentation. Options A and B fail to recognize the implications of the licensee's knowledge and misrepresentation, while option C does not adequately address the nature of the claim made. Thus, option D is the only choice that accurately reflects the legal implications of the licensee's actions.