A Wyoming broker-salesperson represents the seller in a transaction. The buyer is unrepresented. During negotiations, the buyer asks the broker-salesperson directly: 'Is there anything wrong with the foundation of this house?' The broker-salesperson knows the seller disclosed a repaired foundation crack on the disclosure form but the buyer has not yet received the disclosure. The broker-salesperson says, 'The house is in great shape — no issues.' Under Wyoming law, which of the following best describes the broker-salesperson's violation?
Correct Answer
B) The broker-salesperson violated the duty of honesty owed to all parties and may have made a fraudulent misrepresentation
Under Wyoming law and WREC rules, all licensees — regardless of who they represent — owe a duty of honesty and fair dealing to ALL parties in a transaction. Known material defects such as a foundation crack cannot be concealed or misrepresented even when representing the seller. The broker-salesperson's affirmative statement that 'the house is in great shape — no issues' when they knew about the disclosed foundation crack constitutes a fraudulent misrepresentation and a violation of the duty of honesty owed to all parties under W.S. 33-28-101 et seq. and WREC Rules.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
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