In a Scottsdale real estate transaction, the buyer discovers the seller misrepresented the property's zoning status, making the buyer's intended use impossible. The buyer wants to cancel the contract and recover all money paid. What remedy should the buyer seek?
Correct Answer
D) Rescission and restitution
Correct: D - Rescission and restitution. Rescission and restitution is the appropriate remedy when a contract was based on material misrepresentation, allowing the buyer to cancel and recover all payments. Why not A: This option is incorrect because "Reformation of the contract terms" does not match the rule tested by the question. The correct answer is "Rescission and restitution". Rescission and restitution is the appropriate remedy when a contract was based on material misrepresentation, allowing the buyer to cancel and recover all payments. Why not B: This option is incorrect because "Specific performance with price reduction" does not match the rule tested by the question. The correct answer is "Rescission and restitution". Rescission and restitution is the appropriate remedy when a contract was based on material misrepresentation, allowing the buyer to cancel and recover all payments. Why not C: This option is incorrect because "Liquidated damages from earnest money" does not match the rule tested by the question. The correct answer is "Rescission and restitution". Rescission and restitution is the appropriate remedy when a contract was based on material misrepresentation, allowing the buyer to cancel and recover all payments.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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