S sold his lot to B. The lot is the subject of a case filed by X against S. S did not disclose this fact to B. Is S liable to B for fraud? A. Yes, because S has the obligation to reveal the fact to B even if the latter did not ask. B. Yes, because the sale involves transfer of real rights to the property. C. No, because S did not say and do anything to convince B to buy the lot. D. No, because B is bound by the rule of "caveat emptor" or "buyer beware".
S sold his lot to B. The lot is the subject of a case filed by X against S. S did not disclose this fact to B. Is S liable to B for fraud? A. Yes, because S has the obligation to reveal the fact to B even if the latter did not ask. B. Yes, because the sale involves transfer of real rights to the property. C. No, because S did not say and do anything to convince B to buy the lot. D. No, because B is bound by the rule of "caveat emptor" or "buyer beware".
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
S sold his lot to B. The lot is the subject of a case filed by X against S. S did not disclose this fact to B. Is S liable to B for fraud?
A. Yes, because S has the obligation to reveal the fact to B even if the latter did not
ask.
B. Yes, because the sale involves transfer of real rights to the property.
C. No, because S did not say and do anything to convince B to buy the lot.
D. No, because B is bound by the rule of "caveat emptor" or "buyer beware".
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