Simth owned five acres of land in Wilton, New York, on which were two springs of mineral water and machinery to bottle the mineral water. Smith sold the real property to Brown for $300,000 representing that the water was natural mineral water and could be bottled or sold as it flowed from the ground. Smith also represented to Brown that the daily natural flow of water from the two springs was 4,200 gallons. Brown entered into possession and purchased and installed modern machinery for the bottling and of the mineral water. He soon discovered that the water was not natural mineral water, but fresh water to which certain chemicals had been added. He also discovered that the daily flow did not exceed 160 gallons. By the time he discovered these facts, Brown had expended $75,000 for the installation of new machinery.
a) Did Smith commit fraud? Explain.
b) What remedy or remedies, if any, are available to Brown? Explain.
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