The Jameses were negotiating the purchase of the Smith's home but ...

[anjilletteb]

The Jameses were negotiating the purchase of the Smith's home but requested a termite inspection. The inspection came back clear from ABC Bug, Inc The Jameses bought the house and immediately began to notice signs of termite infestation. They called Goodbye Bug, Inc, and their technician confirmed significant termite infestation and damage. The technician said he had inspected the home for the Smiths just a few weeks earlier, but was never asked to repair and exterminate. The Jameses want out of the house and the contract. Do they have a basis?

Question 2

The corporate veil can be pierced under the alter ego theory when:
 A) there were insufficient assets put into the corporation at its creation.
 B) the corporation was formed to avoid personal liability.
 C) personal and corporate assets or debts are mixed.
 D) too many meetings have occurred.

[mcabuhat]

Answer to Question 1

Yes, the case appears to be one of fraudulent misrepresentation. The Smiths knew of the damage and failed to disclose it. The Jameses can rescind the contract.

Answer to Question 2

C