60. 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 the assertion about the new highway exit ramp was made as a fact, despite the licensee's knowledge that it was merely one of several possibilities. This constitutes a material misrepresentation, as it misled the buyer regarding an important aspect of the property’s future accessibility.
A) No, the statement was the licensee's opinion.
This option is incorrect because the licensee presented the information about the exit ramp as a fact rather than an opinion. By stating that the ramp would be built, the licensee misled the buyer into believing in a certainty that did not exist.
B) No, the licensee cannot be held liable for the planners' decision.
While it is true that the licensee cannot control the actions of the planners, this does not absolve them of liability for making a false statement. The issue lies in the licensee's proactive misrepresentation of the facts rather than the outcome of the planners' decisions.
C) Yes, the statement was unjustifiable puffing.
This option is incorrect because "puffing" typically refers to exaggerated statements that are subjective and not meant to be taken as factual. The licensee's statement about the highway ramp was presented as a concrete fact, thereby falling outside the realm of mere puffery.
D) Yes, the statement was a material misrepresentation.
This option is correct as it accurately identifies the nature of the statement made by the licensee. The fact that the licensee knew that the ramp was only a possibility indicates intentionality in misleading the buyer, which is a clear case of material misrepresentation.
Conclusion
The licensee's assertion about the highway exit ramp was a definitive statement presented as fact, thus leading to potential liability for material misrepresentation. The incorrect options fail to recognize the seriousness of the false statement made, which misled the buyer and could have significant impacts on their decision-making regarding the property.