When are statements by an agent actionable and not mere “puffing”?

An Integration Clause provides that the written contract represents the parties’ complete and final agreement and that no verbal claims made by any party prior to the signing of the contract can be relied on or are a part of the contract. In the standard Residential Purchase Agreement, similar language can be found in the “Waiver of Claims” provision which states “Buyer and Seller agree that they are not relying upon any representations made by Brokers or Broker’s agent.” However, relying on the contract’s integration clause will not shield a seller or licensee from their misrepresentations.

The Nevada Real Estate Division cites Epperson v. Roloff, 102 Nev. 206,719 P.2d 799 (1986), in support of this proposition.*  In Epperson, the sellers attempted to claim that the contract’s integration clause stopped the buyer from bringing a misrepresentation claim. In this case, the sellers and their agent, while showing the potential buyers the sellers’ home, made reference to and gestured toward a “solar feature” in the house. After the buyers moved in, they discovered that the solar feature was a hole in the roof covered with corrugated metal painted black. When the buyers sued for misrepresentation, the sellers claimed they had made no affirmative statements about there being a solar panel. They then argued that the contract’s integration clause prevented the buyers from relying on anything they had said unless it was in writing or in the contract. The court found that an integration clause does not bar a claim of misrepresentation when there is a duty to speak.

Other states have held the Integration Clause does not bar a claim for fraudulent inducement against a real estate agent.

* The Nevada Law and Reference Guide, p. IV-17, Fourth Edition, 2014.

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