Do you know what can really ruin the ecstatic feeling of closing a deal? Getting sued. You may know a realtor who has been down that road before. You may have even been threatened by a lawsuit yourself. The most common reason that realtors get sued is “misrepresentation.” Just ask this broker who was sued for it in Minnesota last year. The courts ruled in the broker’s favor in this case because he relied on the county government’s description of the property in his listing. This blog will go into a bit of detail about how to avoid this kind of situation and which steps to follow if you find yourself facing a lawsuit. Keep reading to learn more.
What is Misrepresentation?
The definition of misrepresentation is a false statement of fact that has the capacity to persuade someone to enter into a contract. That could be saying, “The house is green” when it is actually blue. Opinions, however, do not carry the same burden under the law. A simple hedge could be “The house is green, I believe.” Simple, right?
In order for a plaintiff to win a misrepresentation lawsuit, they must prove that they relied on the false statement of fact to enter the contact, and additionally, that the contract they have entered into has resulted in some kind of harm or loss.
There are three different kinds of misrepresentation – innocent, negligent, and fraudulent.
Innocent misrepresentation means that the party who induced the other party to enter into the contract had a reasonable basis to believe that the false statement they provided was, in fact, accurate. This Minnesota case described above is a case of innocent misrepresentation. The broker certainly had a reasonable basis to believe the county government’s description of the property. In these cases, aggrieved parties may sue for losses sustained, but not for a revocation of the contract.
Negligent misrepresentation occurs when a party makes a false statement of fact, when they really should have known better. This really comes down to due diligence. The Minnesota case could have involved negligent misrepresentation if the broker went described the property based solely on a flimsy statement from the previous owner, without checking county or other relevant documents. In these cases, damages and a release from contract may be pursued by an interested party.
Fraudulent misrepresentation is the most serious of the three. This occurs when a broker uses false statements of fact, which they know to be false. Fraud is certainly the right word for this. Aggrieved parties in these cases may certainly pursue damages and for a revocation of the contract.
Working with the Right Legal Team
If you are facing a lawsuit for misrepresentation, it is essential to enlist the help of a dedicated and experienced legal practice. That is exactly what you will find at Adam Law Group. This legal team is known for providing counsel tailored to the needs of their clients. As a Jacksonville-based practice, they have the knowledge necessary to successfully guide you through the legal system. When the stakes are this high, why trust your case to anyone else? Call today to learn more.