Final answer:
To hold the seller or the seller's agents responsible for a material defect in a used house post-sale, the buyer must prove that the defect was material and affected health or safety, was known to the seller or agents, could not be discovered by due diligence, and that the house was not sold "as is." Answer 3) I, II, III, and IV is correct.
Step-by-step explanation:
When a buyer discovers after a sale that the used house purchased has a material defect, the seller or the seller's agents will only be responsible if certain criteria are met. Specifically, the buyer must prove that: I. there was a material defect that adversely affected health or safety; II. the seller or the seller's agents knew of the defect before the sale; III. the defect could not be discovered by due diligence; and IV. the house was not bought "as is." Therefore, the correct answer to the student's question is 3) I, II, III, and IV.
In a Counter Example Situation, like the case of an automobile manufacturer who sells cars knowing one model has a brake defect, the manufacturer is held liable for the injuries and deaths caused due to prior knowledge of the defect and the likelihood of brake failure.
When facing potential buyers with concerns about imperfect information, sellers may offer a warranty or the option to buy a service contract to reassure them. These options enable the buyer to have repairs or replacements handled by the seller, at least for a certain time period, thus providing a sense of security in their purchase.