65.
(p. 394)
Constance was buying a used personal watercraft from Ralph. He told her that the engine
on the watercraft was in good shape. Constance agreed to pay Ralph $4,000 for the watercraft.
She was going to be out of town on vacation, so Ralph and Constance agreed that when she
returned in a week, she would bring over the money and pick up the watercraft. During that week,
Ralph was notified by the manufacturer that the watercraft was being recalled because it had a
faulty engine that needed repair. Ralph said nothing about the condition of the engine or the
recall when Constance came to pick up the watercraft. They chatted about other matters; she
gave him the $4,000, and took the watercraft. Later, Constance started having problems with the
watercraft and found out that Ralph and other initial purchasers had been notified of the issue
with the engine. She asked for a refund accusing Ralph of fraud. Ralph refused on the basis that
he did not make any misrepresentation. Who is correct and why? For purposes of this question,
assume that sales talk or puffery is not at issue.