Question

Caroline assures real estate salesperson, Abby, that the home she's selling has hardwood floors throughout. This appears to be true, but two of the bedrooms which have wall-to-wall carpeting. Abby passes these assurances on to buyers who later discover that neither of the bedrooms has hardwood. What, if anything, is Abby guilty of?

A) She's not guilty of anything since she relied on the owner's assurance.
B) She's guilty of due diligence.
C) She's guilty of misrepresentation.
D) She's guilty of fraud.

Answer 1

Abby is guilty of misrepresentation for assuring buyers that the home had hardwood floors throughout, when two of the bedrooms actually had wall-to-wall carpeting. While she may have relied on the owner's assurance, Abby failed to fulfill her duty to provide accurate information. This situation does not amount to fraud, but Abby should have exercised due diligence.

Step-by-step explanation:

Abby is guilty of misrepresentation, as she assured the buyers that the home had hardwood floors throughout, when in fact, two of the bedrooms had wall-to-wall carpeting.

While Abby may have relied on the owner's assurance, it is her responsibility as a real estate salesperson to accurately convey information to potential buyers. In this case, Abby failed to fulfill her duty to provide correct information.

This situation does not rise to the level of fraud, as fraud typically involves intentional deception and Abby may not have had any malicious intent. However, she should have exercised due diligence by verifying the accuracy of the owner's claim before passing it on to the buyers.