Robert is a licensed Alabama salesperson representing the buyer in a residential transaction in Montgomery. After the purchase agreement is signed, the seller discovers that Robert failed to disclose a known material defect in the property before the buyer signed. Under Alabama law, which of the following best describes the buyer's position regarding the purchase agreement?
Correct Answer
B) The buyer may rescind the contract and seek damages based on fraudulent misrepresentation or concealment
Under Alabama law, including the Alabama Seller Disclosure Act (Code of Alabama §6-9-142) and general fraud principles, a buyer who can demonstrate that a known material defect was concealed or misrepresented may rescind the contract and seek damages. Fraudulent concealment of a material fact vitiates consent and gives the injured party the right to void the agreement and pursue remedies.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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