A buyer enters a purchase agreement for a California condo after the seller provides written documentation overstating the unit's square footage by 200 square feet. The seller knew the figures were false at the time of disclosure. Which legal concept gives the buyer the right to cancel the contract?
Correct Answer
B) Fraud in the inducement, because the seller knowingly misrepresented a material fact to obtain the buyer's agreement
Under California Civil Code §§1571–1572, fraud occurs when a party intentionally misrepresents a material fact to induce another to enter a contract. Square footage is a material fact affecting value and the buyer's decision to contract. Because the seller knowingly provided false figures, this constitutes fraud in the inducement, rendering the contract voidable at the buyer's election under Civil Code §1566.
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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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