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Attorney2, Attorney
Category: Business Law
Satisfied Customers: 7199
Experience:  29 Years In General Practice,
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I have purchased an antique. In the sales contract I signed

Customer Question

I have purchased an antique. In the sales contract I signed it states I can inspect the antique or have an independent inspector appraise the antique. The seller is very knowledgeable as she has bought and sold this type of antique before. The sales contract has an "as is" clause within it that basically states once purchased if I find flaws, it is mine, too bad. The price of the antique is about right for its age and "stated" condition by the seller. The seller gives me a disclosure statement indicating the condition of the antique. I do not get an independent inspection or an independent appraisal. I purchase the antique based on the stated condition of the seller of the antique. After I have received the antique I find issues directly in contrast with what the seller stated in her disclosure statement on the condition of the antique. I find out after I have purchased the antique the seller had an independent inspection of the antique, and once I obtain this, I find the inspection report differs significantly with what the seller stated in her disclosure. Because of this inspection report, the value of the antique is now significantly less than what I paid. I have brought suit. However, in Motion to Dismiss, the opposing counsel brings out that I could have had an independent inspector inspect the antique and had it appraised, which I did not, and now that it is purchased it is, "As Is". The opposing counsel also stated she emailed me her independent inspection report and "assumed" I had received it. However, when I signed the sales contract, her inspection report was not included nor mentioned within the sales contract. Is the contract invalid because the seller was not truthful in her disclosure on the condition of the antique, and all the information (her inspection report) was not present (or mentioned) at the time of sale? Since the sales contract states I could get my own inspection report, do I then take the liability, because I trusted her? Do I have any contractual grounds for suit (meeting of the minds, all information not present, etc.)?
Submitted: 9 months ago.
Category: Business Law
Expert:  LawyerDavid replied 9 months ago.

Ron: my name is ***** ***** I will assist you today. You are describing a fraudulent inducement claim and do have grounds to claim the sales contract is void. The seller provided you a disclosure statement that based on your write up she knew was false. If they e-mailed the inspection report demand that they provide a copy of the e-mail with the dates and your e-mail address so you can review it. The fact you relied upon the seller's disclosure statement in lieu of getting your own inspection report does not alleviate the seller from being responsible for providing you with a false disclosure statement which induced you to enter the agreement. The attorney is seeking to claim the inspection report was e-mailed to you in order to manufacture a fact to cover up for the seller's fraudulent disclosure statement but that is not sufficient and I doubt they can prove the e-mail was sent anyway. You have grounds for a suit based on fraudulent inducement to enter a contract and entitled to claim the contract void and return the antique and get your money back. Alternatively, if you want to keep the antique you might consider negotiating a settlement for what the true value of the item is based on its condition. Either way, you have a valid claim in my opinion and should move forward to get a remedy for the seller's deceitful conduct. Good luck with your claim. David

Also, I am going to offer you a phone call as well if you think it would be helpful to talk through the claim in more detail.

Customer: replied 9 months ago.
Opposing counsel gave me a copy of the email the seller sent. The contract was entered into on the 17th of the month. (Many months ago.) The seller has an email dated the 16th of the month. There is no read request or confirmation I ever got it. There is one more bit of complication. I found out about the antique via an intermediary. However, he was only an intermediary making me aware of the antique. After the sale I paid him a fee for finding me the antique. (He knew I was looking for one to complete my collection.) The seller of the antique mailed the email to the intermediary. The intermediary forwarded the email to me on the 16th. However, I checked my inbox and I never received it. If it went to spam or got blocked via a virus detection it would have been quarantined and automatically deleted after 30 days. The question is, if there is grounds for me to sue, under what legal law/rule or under what case law is there to state what she has done is illegal or she is liable for her not disclosing true fact?
Expert:  LawyerDavid replied 9 months ago.

Thank you for the additional information. The e-mail with the intermediary does add some complication, but the fact is the disclosure statement was false and the subsequent e-mail with additional information does not rectify that fact because you did not receive it and will testify to that fact. The legal theory/law you will rely upon is Fraudulent Inducement. The elements according to the State of Texas for a claim are as follows:

(1) a material misrepresentation was made;

(2) it was false;

(3) when the representation was made, the speaker knew it was false or the statement was recklessly asserted
without any knowledge of its truth;

(4) the speaker made the false representation with the intent that it
be acted on by the other party;

(5) the other party acted in reliance on the misrepresentation; and (6) the party suffered injury as a result. See DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 688 (Tex. 1990).

The defense that is likely to be asserted against you in this instance is: Reliance on a party’s misrepresentation must be justifiable and reasonable.

Here, the other side is claiming you received an e-mail with a report disclosing the correct information and that you were free to get your own inspection at the time of sale so it is not reasonable for you to have relied on the seller's misrepresentations in the disclosure statement.

It is a judgement call on your part as to whether you have a good case. It is likely to come down to them claiming you received the e-mail, you saying that you didn't, and even if you did it does not rectify the seller's false disclosure statement intended to induce you into making the purchase.

Sorry for the long write up, but the other thing I find strange is the intermediary and the seller both claim to have sent you an e-mail and you did not get either e-mail which leads me to believe the intermediary may want the sale to stand as well to keep their money and therefore decided to support the e-mail story.

In any event, if you definitely want to move forward with your claim based on the above, I would suggest consulting with a local attorney in your specific area to discuss the facts, the judge, and the other attorney involved to get a better feel for your chances of success. David

Customer: replied 9 months ago.
I have found that when the Texas Supreme Court gives a decision either in favor of a lower court or over turn a lower court, if the consenting opinion specifies the Fraud, that carries a lot of weight when stated in lower court. Do you know of a Texas Supreme Court decision that upheld a fraud case or over turned one such as you mention, (Wackenhut)?
Expert:  LawyerDavid replied 9 months ago.

I am sorry but I do not know any such a case. I am going to opt out to see if an attorney located in Texas may be able to assist you further. Thanks, David

Expert:  Attorney2 replied 9 months ago.

I am a different Attorney and it will be my pleasure to assist you. Which Wackernhut case are you referring to?

Ron is this the same question with regard to real estate? I see Ray picked up the question you asked.

Customer: replied 9 months ago.
DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 688 (Tex. 1990). Reliance on the sellers statements that induced me to buy the antique. It is related yes. I am trying to find a way to sever an "as is" clause within the contract.
Expert:  Attorney2 replied 9 months ago.

Thank you for the clarification. I found your case.

I know we spoke in another question that I cannot access right now, unfortunately. You purchased the property from the seller or a lender? Do you have a copy of your contract?

In Real Estate just because the contract states that the property is selling "as is" does not negate the duty of the the seller to disclose material defects. Most contracts also provide the ability for a purchaser to have an inspection and if they find material defects that impact the real property they can terminate the transaction.

If the seller has no unaware of the condition of the property (they never lived in the property) they cannot disclose what they do not know. The other exceptions are the following:

"One important matter to understand is that the disclosure is in fact a legal representation of fact by a seller, and is subject to liability if a buyer reasonably relies on its accuracy in making a purchase decision. It is not, however, a warranty that the property is suitable, and does not take the place of an inspection. So in other words, if a seller accurately reflects his or her knowledge and belief, a buyer should not be successful in later suing the seller for a defect.

When is a seller exempt from giving the notice? The statute lists a number of transfers in which the requirement does not apply. An exact reproduction of the entire list of exemptions is beyond the scope of this article, but to summarize them, a disclosure is not required for transfers:

1. Made as a direct part of a court order, foreclosure or bankruptcy;
2. Back to a lender in lieu of foreclosure;
3. From a lender to a new buyer resulting from the lender’s repossession of the property pursuant to a foreclosure or deed in lieu of foreclosure;
4. From a fiduciary to a new buyer to settle an estate, guardianship, conservatorship or trust. This would include executors, administrators and trustees;
5. From one co-owner to another;
6. Between spouses or direct relatives;
7. As part of a divorce;
8. To or from a governmental entity;
9. An unoccupied new residential home;
10. A home whose value represents 5% or less of the property value as a whole.

In evaluating these exemptions, many sellers mistakenly assume that they are exempt if they inherited the property, and never occupied the home. This is incorrect, unless the transfer is made directly from the executor as part of the distribution of the estate. Individual heirs still must make the disclosure if the estate has already been distributed, or if no probate of a will occurred. Likewise, many folks believe that if they hold the property in a revocable grantor trust, then they are exempt. This is also probably incorrect. It is highly advisable for trustees of these type trusts to issue the disclosure notice; only trustees of irrevocable trusts, conveying property as part of the distribution of the trust, are exempt. Otherwise, everyone would form trusts to avoid disclosure liability!

Remember, a buyer can terminate a transaction for any reason up to seven days after finally receiving a notice, if not received prior to contract. So have your sellers fill out the form is as much detail as they know to be true, and rest assured that they are protected from future liability."

Expert:  Attorney2 replied 9 months ago.

Please do not hesitate to ask me any additional questions that you may have with regard to this matter. I would be my pleasure to continue to assist. If you would be kind enough to rate my service positively so I will receive credit for my work I would appreciate it.

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