Tom and Linda are selling their Warwick, Rhode Island home. They accepted a purchase offer without first providing the buyer with the Rhode Island Seller's Disclosure form. The buyer later discovers a significant basement flooding issue that was not disclosed. Under R.I. Gen. Laws § 5-20.8, what remedy is most likely available to the buyer?
Correct Answer
A) The buyer may rescind the contract and recover the purchase price, because the required disclosure was not made before acceptance
Under R.I. Gen. Laws § 5-20.8, failure to provide the required seller's disclosure form before acceptance of an offer can result in rescission of the contract. The statute is designed to protect buyers by ensuring they have material information about the property before becoming contractually bound. When a seller fails to disclose known material defects and the disclosure was not properly made prior to acceptance, the buyer has the right to rescind the contract and seek recovery of amounts paid.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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