The listing broker made a material misrepresentation about the property to an unrepresented buyer. Which of the following statements is TRUE?

The doctrine of caveat emptor, or "let the buyer beware," does not absolve brokers from liability in cases of material misrepresentation. If a misrepresentation is proven to be material, the broker and potentially the seller can be held liable for damages, contradicting this statement.

This statement implies that liability can vary, which is accurate, but it does not provide a definitive answer regarding the broker's responsibility. It acknowledges the complexity of misrepresentation cases but fails to directly address the broker's liability for financial loss.

While this statement seems plausible, the question specifically asks for a true statement about the broker's ability to claim negligence, which is more directly relevant to their potential defenses against liability rather than broad liability itself.

This statement is misleading; generally, a purchase and sale contract remains binding despite misrepresentations unless the misrepresentation is so significant that it renders the contract void. Therefore, it does not accurately reflect the legal standing in cases involving material misrepresentation.