23. Under what theory would the buyer be most likely to recover?

To make a prima facie case for fraud, a plaintiff must demonstrate that (i) a misrepresentation of material fact was made by the defendant; (ii) that the misrepresentation was knowingly false; (iii) that the defendant intended to induce the plaintiff to rely on the misrepresentation; (iv) that the plaintiff actually relied on the misrepresentation; (v) that the reliance was justifiable; and (vi) that the plaintiff experienced damages as a result.

A is correct. Based on the facts as presented, the seller knowingly misrepresented the boat's condition to induce the buyer to purchase it. Despite falsely representing that the boat was in good condition and seaworthy, and selling the boat for a price fitting this condition, the seller was aware that the boat was actually badly damaged. Further, the seller disguised the boat's actual condition by conducting only cosmetic repairs, rather than making the structural fixes necessary. This factor, coupled with the seller's assurances, made it justifiable for the buyer to rely on the seller's misrepresentation. As a result, the buyer was cheated, paying for a boat that was in good condition and seaworthy, but actually receiving a vessel that was badly damaged and in dangerous condition. To this end, the buyer would likely prevail under a fraud claim. Therefore, this would be the best theory to recover against the seller.

B is incorrect. Endangerment would not be a viable basis for the buyer to recover against the seller. Endangerment is a tort claim which applies in situations where the defendant intentionally or accidentally (negligently) exposes others to possible danger or harm, typically involving a physical injury sustained by the plaintiff. Under the facts here, although the boat was dangerous, there is no indication that the buyer was subjected to harm by the seller.

C is incorrect. Negligent misrepresentation would not be a viable basis for the buyer to recover against the seller. Unlike the similar tort of fraud, a threshold requirement of a negligent misrepresentation claim is that the defendant was acting in a business or professional capacity. Here, although the seller sold a boat to the buyer, there is no indication that the seller was in the business of selling boats. Therefore, the seller would not be liable for negligent misrepresentation.

D is incorrect. Strict products liability would not be a viable basis for the buyer to recover against the seller. Strict products liability can be pursued if the defendant is a commercial supplier (i.e., a manufacturer or seller) with an absolute duty to provide products which are not in a defective condition. Further, for strict products liability to apply, the defect must have existed when the product left the defendant and reached the plaintiff without substantial alteration. Under the facts here, there is no indication that the seller of the boat was a commercial supplier of boats, nor was the boat defective based on design or manufacturing issues. Instead, the seller damaged it during use and then made alterations by conducting cosmetic repairs. All of the facts presented focus on the deliberate misrepresentations by the seller and the buyer's reliance on them. Consequently, the buyer would not recover under a strict products liability claim, but would likely be successful under a fraud claim against the seller.