Contracts

A Virginia purchase contract has a settlement date of June 30. On June 28, the seller discovers the roof needs major repair. The seller must:

ARepair the roof before June 30 at the seller's expense
BDisclose the newly discovered defect to the buyer promptly✓ Correct
CClose the transaction without mentioning the roof
DTerminate the contract and return the earnest money

Explanation

The seller has a continuing duty to disclose newly discovered material adverse facts, even after the contract is signed. Concealing a newly discovered defect to push the transaction to close would be fraudulent.

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