In: Finance
Q: A homeowner tells a prospective buyer of his home that the downstairs bedroom is 10 x 9 feet because he measured it himself. However, his measurements were incorrect and the bedroom is actually 9 15/16 feet x 9 feet. The homeowner’s statement:
a: would likely play a significant role in inducing a reasonable person to enter into a contract to purchase the home.
b: is a material misrepresentation since it was stated intentionally.
c: would support an action for innocent misrepresentation. INCORRECT
d: would not support an action for misrepresentation because the statement is likely not material.
Answer- d: would not support an action for misrepresentation because the statement is likely not material.
The homeowner's statement would have been a case of misrepresentation but if we see the difference between the measurement of the room, there is a slight difference between the correct measurement ( 9 15/16 feet x 9 feet ) and the earlier stated measurement ( 10 x 9 feet). So the statement is likely to be immaterial, which wouldn't have created any issue if the buyer had purchased the house knowing the incorrect measurement.