Discussion Scenario:John Cridog, a developer, was building a development of townhouses called West Point, Texas. All the townhouses in the development were to have individual boat slips. Liamand JessicaLutter, husband and wife, bought one of the townhouses. The sales contract between Cridogand the Luttersprovided that a boat slip would be built and was included in the price of the townhouse. The contract stated that permission from the Texas Department of Natural Resources (TDNR) had to be obtained to build the boat slips. It is undisputed that a boat slip adds substantially to the value of the property and that the Luttersrelied on the fact that the townhouse would have a boat slip.

Prior to the sale of the townhouse to the Lutters, the TDNR had informed Cridogthat it objected to the plan to build the boat slips and that permission to build them would probably not be forthcoming. Cridogdid not tell the Luttersthis information but instead stated that there would be "no problem" getting permission from the state to build the boat slips. The Lutterspurchased the townhouse. In the end, the TDNR would not approve the building of the boat slips for the Lutter's townhouse.

Topic Questions:

1.Using the IRAC method, when the Lutterssued Cridogfor damages for fraud after the TDNR did not approve the building, who wins the lawsuit? Why?

2.Explain why this would not be considered a mistake.

3.What contractual remedies would the Luttershave if they win? What contractual remedy(ies) would you choose? Explain.