An Employee Prepared an Appraisal of a Property for His

question 118

Multiple Choice

An employee prepared an appraisal of a property for his real-estate development company. The employee had been told that the appraisal would be used by the company to attract a potential investor, Mr. Jones, for the company's client, Mr. Lee. Because the appraiser carelessly forgot to check the recent changes in the zoning by-laws, the appraisal was not accurate. Mr. Jones was misled about the value of the land and suffered a financial loss of $200,000. On these facts, which of the following is true?

• A) Mr. Jones could not take any action because he had no contract with the company or the appraiser.
• B) A person cannot be sued for words that cause loss, only for actions that cause physical injury.
• C) If Jones sues the appraiser, he cannot also sue the employer company.
• D) The cause of action most likely to be taken by the investor is defamation.
• E) To win in an action against the appraiser, Jones must prove that the appraiser owed him a duty of care, fell below the standard of care owed, and thereby caused him a foreseeable loss because of his reliance on the information.

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Definitions:

Authentic Responses

Genuine reactions or answers that are true to one's feelings, beliefs, or personality, without pretense or imitation.

Set Limits

The act of establishing boundaries or rules in a relationship, interaction, or environment to maintain order and protect well-being.

Contracting

A process in professional services, particularly in therapy or social work, that involves establishing agreements on the goals, roles, and responsibilities between a service provider and client.

Declarative Statements

Sentences that make a statement or express an opinion or fact, typically in a straightforward and unequivocal manner.