Overview
I'm working on a economics writing question and need the explanation and answer to help me learn.
A buyer makes a contract to purchase a parcel of land for residential use for $10,000. In the process
of preparing for development, however, the buyer discovers a mineral deposit worth $500,000. The
seller learns about the discovery and sues to invalidate the contract, claiming mistake.
(a) Is the discovery of the mineral deposit socially valuable?
(b) Did the buyer discover the information deliberately or casually?
(c) Will a decision by the court to invalidate the contract affect the discovery of valuable mineral
deposits in the future?
Now suppose that prior to making the contract, the buyer had conducted an aerial survey of the
property that indicated a high probability of a mineral deposit. The buyer then went ahead with the
purchase for $10,000 without revealing his discovery to the seller.
(d) How does this change your answers to the preceding questions?