PSI Oklahoma Real Estate Practice Test

If an agent fails to discover crumbling tiles and the buyer sues for misrepresentation, the agent may face exposure to what?

1. Fraud

2. Negligent misrepresentation

3. Strict liability

4. Unjust enrichment

The correct answer is: Negligent misrepresentation

In this scenario, the agent may face exposure to negligent misrepresentation because negligence pertains to the failure to exercise the care that a reasonably prudent person would under similar circumstances. If the agent did not discover the crumbling tiles, it demonstrates a lack of due diligence or care in representing the property to the buyer. To establish negligent misrepresentation, the buyer would need to show that the agent had a duty to provide accurate information, breached that duty by failing to conduct a reasonable investigation, and that this breach resulted in the buyer suffering damages. Negligent misrepresentation is distinct from fraud, which involves intentional deceit or misleading conduct. In this case, there is no indication that the agent knowingly provided false information about the condition of the tiles. Strict liability typically applies in cases of inherently dangerous activities or defective products rather than real estate transactions, and unjust enrichment refers to benefiting at another's expense without a just cause. Thus, the context and nature of the agent's failure align most closely with negligent misrepresentation.