82. Darlene owns a five-story apartment building in Pound City. Darlene offers the building for sale to Percy. She gives Percy a sheet she has prepared, which states, “The current rent roll is $5,000 per month, consisting of ten apartments at $500 each.” She does not disclose to Percy a fact well known to her, namely, that under the Rent Stabilization ordinance in force in Pound, the highest rent properly chargeable for any of the apartments is $400, and that any tenant who becomes aware of his rights can sue to have the rent reduced to that amount.

Percy is aware that the Rent Stabilization ordinance exist, and is also aware that there are records at the Pound City Hall showing, for each apartment building, the highest rent that can be charged per apartment. Percy decides that Darlene looks honest, so he neglects to check the town records, even though he could easily do this. He buys the building at a price that appears economically sensible to him based on a

$5,000 per month rent roll, but that he would not have paid had he known the legal rent roll was only $4,000.

Shortly after the closing, the tenants discover their rights, bandd together, and successfully sue to have each person’s rental reduced to $400. Percy sues Darlene for fraudulent misrepresentation and/or non-disclosure. Darlene defends on the grounds that: (1) she has no liability for what was essentially non-disclosure; and (2) in any event, Percy was not justified in relying, because he could have easily performed his own investigation which would have disclosed the true facts. Which, if either, of these defenses has merit?
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