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Licensee Ken has worked long hours with buyer client Patrick to negotiate an agreement to buy Jordan’s house. A day before closing, Patrick tells Ken that he just lost his job, and he’s sure that the mortgage won’t close. However, he doesn’t want to abandon the deal yet, "just in case." What should Ken do?

User Hilo
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1 Answer

3 votes

Answer:

Ken must disclose this information as it is a material fact.

Step-by-step explanation:

A material fact is a fact that a reasonable person would recognize as germane to a decision to be made, as distinguished from an insignificant, trivial, or unimportant detail. In other words, it is a fact, the suppression of which would reasonably result in a different decision; meaning it would be the most significant information when someone is making a decision, in this instance, whether or not Patrick would buy Jordan’s house. Falsification of a material fact that would cause a party to a contract to refrain from entering into the contract may be grounds for rescission, meaning that Ken has an obligation to disclose this information.

User Tracey
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