Question

All-Mart Discount Stores Corporation contacts to buy ten acres from Suburban Enterprises, Inc. as a site for a new store. The contract calls for a "warranty deed" without specifying the convenants to be included in the deed, or any particular guaranties. The title examination uncovers a zoning law that would affect All-Mart's proposed use of the land. According to a survey that All-Mart commissions, one corner of an adjacent, enclosed parking lot is on part of the property that Suburban is attempting to convey. Can All-Mart avoid the contract? If so, on what basis? If not, why not?

Answer 1

All-Mart can avoid the contract on the basis of misrepresentation that is suburban Enterprises unknowingly suppressed this material fact from All-Mart.

Misrepresentation means that defendant innocently did a wrong where the other party got affected by this wrong. So, it does not entitle All-Mart to file suit but entitle it to avoid the contract.

However if the All-Mart can prove that suburban Enterprises knew about zoning law that will affect the land use by All-Mart than All-mart can also file a suit for fraud. It is to be understood that if there is intentional misrepresentation that is the defendant had intentionally suppressed material fact from plaintiff than it becomes a case for fraud.