Wisconsin Court: “That Shouldn’t Be a Problem” = Misrepresentation

Judget with gavel, law books and contract

A lengthy court battle came to an end when the Wisconsin Court of Appeals found in favor of two buyers in the case of Marchese v. Miller, et al. The buyers alleged that when purchasing a lot from a builder/seller, their broker intentionally misled them. Prior to signing the contract, they asked their broker via email if contract amendment terms for the removal of a holding pond would be in the contract. The buyers did not want to pay the seller for the lot before the holding pond was removed. The removal of the pond was contingent upon the approval of the city and the homeowners association. When the broker responded in an email, “that shouldn’t be a problem,” the buyers assumed that funds would not be transferred to the seller until the pond could be removed at no cost to them.

However, when the documents were signed, the broker did not explain that $100,000 was being transferred to the seller, who did not have approval to remove the pond. The buyers were then unable to build on the lot and were forced to buy a different property. The Court concluded that the broker’s failure to disclose that the contract amendment terms were not included in the closing statement supported the jury verdict of intentional misrepresentation. “The Court observed that the broker knew that the buyers believed that their expectations would be honored, which was the whole point of the contract amendment, and he said, ‘that shouldn’t be a problem’.”

Copyright: ARELLO registered. Condensed from ARELLO’S Boundaries magazine (2015 June)

Full article: Arello Boundaries Excerpt Wisconsin June 2015

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Originally Published June 25, 2015

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