Jack Payson was the listing agent for some property sold by Alice and Dan Faroni. The Faronies had agreed to finance the purchase for the buyer. Payson never told the Faronies to secure their financing with a deed of trust or mortgage. When the buyer defaulted on the payments, the Faronies could only seek a judgment against the buyer and the litigation process was expensive and the judgment
difficult to collect. Which of the following is an accurate statement about this situation?
A) Payson is not a legal adviser and has not done anything that results in liability to the Faronies.
B) Payson breached his duty of reasonable care and would have liability to the Faronies for their losses from the lack of security for the loan.
C) Whether Payson would have liability depends upon whether he was an exclusive-right-to-sell agent or part of an open listing.
D) Payson would have liability to the Faronies only if they asked him for his advice on the financing.
B
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