A California home buyer learns after closing that the seller intentionally concealed a major foundation crack that was visible during the seller's ownership. The buyer wants to undo the transaction. Which remedy is most appropriate under California law?
Correct Answer
A) Rescission of the contract based on fraud in the inducement
Under California Civil Code §1689(b)(1), a party may rescind a contract when their consent was obtained through fraud. The seller's intentional concealment of a known material defect constitutes fraud in the inducement, making rescission the appropriate remedy. Rescission voids the contract and restores both parties to their pre-contract positions, which is exactly what the buyer seeks by wanting to undo the transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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