medium · National Real Estate Exam disclosures
A seller's agent knows that a property was previously used as a meth lab, which is a material fact. The seller does not know. The agent fails to disclose it.
Under the doctrine of vicarious liability, can the seller be sued for fraud?
- Yes, because the agent's knowledge is imputed to the seller, so the seller's silence is legally considered an intentional concealment of a known defect.
- Yes, but only if the property was sold in a state that strictly follows the traditional common-law doctrine of caveat emptor between private parties.
- No, because fraud requires proof of 'intent,' and an uninformed seller cannot personally have formed any intent to deceive the buyer at the time of the sale.
- No, under these facts the buyer can only sue the seller for negligent misrepresentation rather than for intentional common-law fraud in most state jurisdictions.
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