Summary for law case | Law homework help

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Welcome to the Seesaw: Buyer versus Seller

FACTS: Dalarna Management Corporation owned a building constructed on a pier on a lake. There were repeated difficulties with rainwater leaking into the building, and water damage was visible in the interior of the building. Dalarna made a contract to sell the building to Curran. Curran made several inspections of the building and had the building inspected twice by a licensed engineer. The engineer reported there were signs of water leaks. Curran assigned his contract to Puget Sound Service Corporation, which then purchased the building from Dalarna. Puget Sound spent approximately $118,000 attempting to stop the leaks. Puget Sound then sued Dalarna for damages, claiming that Dalarna’s failure to disclose the extent of the water leakage problem constituted fraud.

DECISION: Judgment for Dalarna. Curran was aware there was a water leakage problem, and therefore the burden was on the buyer to ask questions to determine the extent of the problem. There was no duty on the seller to volunteer the extent of the water damage merely because it had been a continuing problem that was more than just a simple leak. The court reached this conclusion because the law “balances the harshness of the former rule of caveat emptor [let the buyer beware] with the equally undesirable alternative of courts standing in loco parentis [in the place of a parent] to parties transacting business.” [Puget Sound Service Corp. v Dalarna Management Corp. 752 P2d 1353 (Wash App 1988)

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