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Richard and Danita Are Negotiating the Sale of Richard's Car

Question 32

Multiple Choice

Richard and Danita are negotiating the sale of Richard's car.Danita had been present a few months earlier when Richard bragged to a group of friends that his car got 33 miles to a gallon in city driving,which was an exaggeration.Before they agree on a price for the car,Richard:


A) is under no obligation to disclose the actual mileage per gallon unless Danita specifically asks him.
B) is under an obligation to disclose the actual mileage per gallon regardless of whether Danita specifically asks him because he knows she is relying on his earlier erroneous statement.
C) need not say anything about the mileage per gallon because nondisclosure of a fact cannot amount to misrepresentation.
D) must, under any circumstances, reveal the actual mileage per gallon because failure to disclose a material fact always constitutes fraud.

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