Contract Law 2

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    • #6830
      Deann Neil
      Participant

      I have a question on the quiz Q8? Why is the answer positive fraud when the buyer didn’t ask about the roof leak? Isn’t this a negative or passive fraud situation?

    • #6831
      Brian Swan
      Keymaster

      Sorry for the delay. My notifications about these posts has been going to my junk mail for some reason.

      It’s positive fraud because the seller moved a box to hide the defect. By doing so, the seller is misrepresenting the true state of the property. Misrepresentations are positive fraud.

    • #6926
      Cynthia Wilcox
      Participant

      Will you please provide further clarification?
      In the text book example, the seller paints over water marks to cover up damage. When asked about it, the seller states that the basement does not leak. This example is used to describe positive intentional fraud.
      For the Negative/Passive fraud, the same example is used, but the seller is never asked about leaks. He just doesn’t disclose it. It this instance, isn’t he painting over water marks misrepresenting the true state of the property, just like the exam question when she moves a pot to hide the damage, but doesn’t disclose it because she is never asked? I don’t understand the difference between the two examples. Based on the example in the manual, it seems to me she is guilty of negative/passive intentional fraud because she intentionally covered damage but was never asked about it.
      Thank you.

    • #6928
      Brian Swan
      Keymaster

      You’re correct, Cynthia. As we’ve edited the book and revised it, there has always been a focus on updating the statutory changes that occur. As a result, the contract law example that you mentioned hasn’t been fully examined as we’ve tried to make the textbook available to students as soon as laws change. So, the example in the book isn’t well written. The example will be revised for the next print.

      Misrepresentations can be verbal or non-verbal. If a seller tries to hide something by painting over it or blocking the defect’s visibility, that would be a misrepresentation. Concealment/non-disclosure is when nothing is said without necessarily trying to hide it.

      Sorry for the confusion, we will be taking care of the issue in the book.

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