Property
Seller's Duty to Disclose

1. Suppose that Litton purchases a home from Devine. Shortly after Litton moves in, the area has two weeks of sustained rain, and the ceilings sustain significant water damage due to several roof leaks. Litton had not seen any visual indication of roof leaks prior to completing the purchase, but he did not have anyone climb on the roof to inspect the roof's condition. Litton wants to know whether he has any possibility of succeeding in an action against Devine, either for rescission of the contract or for damages for the cost of repairing the roof and ceilings. What advice would you give him? What additional information, if any, would you want to discover?

2. Several years ago, before Stephon Marbury was washed up as an NBA player, he purchased a home in the Phoenix area after signing a contract to play with the Phoenix Suns. Shortly after moving in, Marbury discovered that his seller was associated with area gang activity and trafficked in drugs, and had often transacted drug business in the home. Marbury sued to rescind the contract, arguing that this was material information that the Seller should have disclosed. Do you agree? Why or why not?

3. Suppose that in Problem 1, Devine did not disclose to Litton that the previous owners of the home had died as the result of a grisly murder-suicide. Could Litton state a cause of action for nondisclosure? Consider the Missouri statute quoted in note 3 on page 803. How would this change your evaluation of the hypothetical? What's the rationale/purpose of the statute? Do you think the statute is sensible as a policy matter?

4. Suppose that the Joneses are showing their home to a prospective buyer, Mr. Goodman, who is an Orthodox Jew with a young child. The Joneses know that their next-door neighbor is an avowed Nazi who is active in an area Aryan Brotherhood group. The Joneses also know that a registered sex offender (formerly in prison for child molestation) lives on the same street, five houses away. The Joneses do not disclose these matters to Mr. Goodman. Should the duty to disclose extend to this information? Why or why not?