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What is Negligent Misrepresentation in Real Estate?

Negligent misrepresentation is a civil violation in real estate and contract law. This means that a victim of negligent deception can sue in court for monetary damages. The duty of an individual to act appropriately in a particular set of circumstances is known as negligence. The individual behaving negligently causes a plaintiff to suffer monetary damages as a result of the failure. The inability to check whether a statement of fact in a contract is true is known as negligent misrepresentation in the contract environment.

What Makes Negligent Misrepresentation Negligent?

A plaintiff must show the following elements to prove negligent misrepresentation:

  • In a contract, the defendant made a representation;
  • The portrayal was deceptive;
  • The statement was made carelessly or without reasonable grounds to assume it was accurate.
  • The plaintiff relied on the representation in a reasonable manner; and
  • Plaintiff’s reliance was the legal reason for her suffering damages.
  • A representation is a statement that can be verified true or incorrect (e.g., “This car has never failed an inspection”). When hearing or reading the deception, a person of average intelligence and common sense would believe “reasonable reliance.” There has been no reasonable reliance if such a person would not believe the representation.

In contract law, what is negligent misrepresentation?

Negligent misrepresentation can happen in a number of situations. For example, you and I sign a contract in which you agree to pay $400.00 for my old bicycle. I am a seasoned motorcycle rider. You’ve never been on a bicycle before. You’re afraid that the fact that the bike is being used may pose a safety hazard before we sign the contract. I represent to you that the bike’s brakes “function perfectly.”

In truth, I’m not sure if they operate at all because I haven’t rode the bike in over a decade, potentially due to a brake issue. After that, I placed my assurances in writing in the contract. The buyer buys the bike and takes it for a test drive based on the explicit representation that the brakes are in good operating order. Assume the brakes fail one minute after the buyer gets on the bike. For the bike to pass a state-mandated inspection, the buyer must replace the brakes.

I’ve made a negligent misrepresentation under these hypothetical circumstances. You relied on a representation I made recklessly, without checking to see if it was accurate. You, as a seasoned bike rider, had reason to believe my claim that the brakes were functional. You were hurt as a result of the misrepresentation.

In real estate law, what is negligent misrepresentation?

When a seller or real estate agent makes a misleading statement concerning a piece of property, this is known as negligent misrepresentation. To their peril, a plaintiff relies on a fraudulent declaration.

When a potential buyer inquires about if any of the neighbors indulge in loud activities in the evening, this is an example of this. Because the agent doesn’t know the response, he assumes it’s “yes,” and in order to seal the sale quickly, he tells the buyer “yes” and records it in the contract.

The buyer acquires the residence based on the agent’s careless assumption. The customer is disturbed in their sleep after purchasing the residence because of the loud evening noises. The agent has engaged in careless misrepresentation by neglecting to learn the true facts concerning the neighbor’s evening activities.

What are the Options for Negligent Misrepresentation Victims?

A contract victim who has been the victim of negligent misrepresentation may file a lawsuit in order to collect money damages caused by the deception. For example, a buyer of a bike with broken brakes may sue the vendor for the cost of the brake examination. Damages in a breach of contract action including negligent misrepresentation are often restricted to monetary damages. In these circumstances, the courts do not award damages for physical harm, emotional injury, or pain and suffering.

An equitable remedy may also be available to the victim. A non-monetary remedy to which a successful party may be entitled is known as an equitable remedy. Contract rescission is one sort of equitable remedy. When a court orders the cancellation of a contract, it is known as contract rescission. The contract will be terminated if you cancel it. A buyer obtains a refund and the seller receives the property they sold under a rescission. The goal of the rescission remedy is to put each party back in the position they were in before the contract was signed.

Is it necessary for me to hire a lawyer if I have been the victim of negligent misrepresentation?

If you suspect you have been a victim of negligent misrepresentation, you should speak with a business lawyer. This type of lawyer focuses on commercial disputes, breach of contract, contract drafting, and contract review, among other things.

The facts of your case can be evaluated by an expert business attorney near you. The lawyer can advise you on whether you might be able to prove in court, using admissible evidence, that the defendant made a false statement on which you relied to your detriment. This lawyer can aid you in acquiring evidence as well as represent you in negotiations and court.

Real Estate Expert Witness Services by Craig Cherney, Esq.

Craig Cherney is a trusted client advisor and a sought after real estate lawyer and expert witness who is hired by the nation’s top Real Estate Litigation Attorneys to help resolve their litigated real property matters.  Craig has appeared as a testifying expert witness before judges and juries in California, Arizona, Nevada and other jurisdictions across the country. Craig Cherney, Esq. Expert Witness Real Estate480-399-2342.  If you are litigating an easement case, Craig Cherney might be able to help you advance and win your case.

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