Negligent misrepresentation occurs when:

• A. The agent should have known that a statement about a material fact is false
• B. The agent intentionally fabricates information
• C. The agent provides an opinion without any factual basis
• D. The agent discloses all material facts accurately

Answer: (A)

Negligent misrepresentation happens when a person makes a false statement about a material fact and fails to exercise reasonable care to verify it, meaning they should have known the information was likely false. This reflects carelessness rather than an intent to deceive, and it can mislead the other party who relies on that statement.

So, the best fit is the idea that the agent should have known that the statement about a material fact was false—the failure to use reasonable due diligence constitutes negligence. The other scenarios describe intentional fraud (deliberate fabrication), merely giving an opinion without basis (which may not be a misrepresentation of fact), or truthful disclosure (no misrepresentation at all).