An Employee Prepared an Appraisal of a Property for His

question 131

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 $20 000.Given 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; he can only sue one or the other.
• 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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