California Real Estate SalespersonLaws of Agency and Fiduciary DutiesHard
A licensed salesperson working for a broker, while showing a listed home, tells prospective buyers that the roof was replaced last year when in fact it was never replaced, and the salesperson never verified this claim. The buyers purchase the home and later sue for fraud. Under California agency law, who may be held liable?
- AOnly the seller, since the salesperson was merely relaying information
- BBoth the salesperson and the broker, under the doctrine of vicarious liability
- COnly the salesperson, since the broker had no personal knowledge of the false statement
- DNeither party, since the buyers should have conducted their own roof inspection
Show answer & explanationAnswer & explanation
Correct answer: B. Both the salesperson and the broker, under the doctrine of vicarious liability
Under respondeat superior, a broker is vicariously liable for the acts and misrepresentations of salespersons operating within the scope of their employment, even if the broker had no personal knowledge of the false statement. The salesperson also remains personally liable for the misrepresentation.
Why the other options are wrong
- A. Incorrect; the seller did not make the misrepresentation, the salesperson did.
- C. Incorrect; the broker's lack of personal knowledge does not shield them from vicarious liability.
- D. Incorrect; buyer inspection duties do not excuse an agent's affirmative misrepresentation.
Vicarious Liability (Respondeat Superior)
A broker can be held legally responsible for the wrongful acts of a supervised salesperson committed within the scope of the salesperson's employment, even without personal knowledge.
- Applies to fraud, misrepresentation, and other torts.
- Does not require broker's personal knowledge.
- Salesperson remains individually liable as well.
Memory trick: The boss answers for the employee's lies made on the job.