Contracts
A seller who fraudulently misrepresents a material fact to induce a buyer to sign a contract may be subject to:
AOnly a refund of earnest money
BRescission of the contract, damages, and possible punitive damages✓ Correct
COnly a warning from AREC
DOnly the duty to repair the misrepresented defect
Explanation
Fraudulent misrepresentation entitles the defrauded party to rescind the contract, sue for actual damages, and in egregious cases seek punitive damages. The seller may also face AREC disciplinary action if licensed.
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