Question
George and June Mitchell agreed to purchase a twenty-acre parcel of real property from the Smiths with the intention of using it to raise horses.
George and June Mitchell agreed to purchase a twenty-acre parcel of real property from the Smiths with the intention of using it to raise horses. In purchasing the property, the Mitchells relied on their impression that at least four acres of the subject property had a right to irrigation from Slate Creek.
The earnest money agreement to the contract provided:
D. Water Rights are being conveyed to Buyer at the close of escrow.... Seller will provide Buyer with a written explanation of the operation of the irrigation system, water right certificates, and inventory of irrigation equipment included in sale.
The earnest money agreement also provided:
THE SUBJECT PROPERTY IS BEING SOLD "AS IS" subject to the Buyer's approval of the tests and conditions as stated herein. Buyer declares that Buyer is not depending on any other statement of the Seller or licensees that is not incorporated by reference in this earnest money contract [Bold in original].
Before signing the earnest money agreement, the Smiths presented to the Mitchells a 1977 Water Resources Department water rights certificate and a map purporting to show an area of the subject property to be irrigated ("area to be irrigated" map), which indicated that the property carried a four-acre water right. Both parties believed that the property carried the irrigation rights and that the Mitchells needed such rights for their horse farm. The Mitchells did not obtain the services of an attorney or a water rights examiner before purchasing the property.
After purchasing the property and before establishing a pasture, the Mitchells learned that the property did not carry a four-acre water right. Explainfully whether the Mitchells may rescind the contract
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