Duty of Agent to his principal Q3

Q.
Nelson is an estate agent. He was instructed by Rama to evaluate Building X. Rama has stated that Nelson's Report is important as it will be used by him to make a decision whether or not to buy the building. Nelson prepared a report based on photographs shown to him by the owner of the building. The report is not correct because the floor of the building was damaged and several other parts have been destroyed by termites. Rama has read the report by Nelson and decided to buy the building. Having purchased the building, Rama suffered loss and has restored the building at a cost of RM5 million. Rama wishes to claim his losses from Nelson.

Advise Nelson.

(20 marks, 2011 Q3)