Question:

William B. Travis owned a hotel in Falfurrias on U.S. 281 which he sold to Stephen F. Austin. During the course of negotiations, Travis represented that the hotel netted around $ 50,000 during the prior calendar year and that he expected it to net $ 75,000 the following year. The hotel books, which Travis made available to Austin before the sale but were never checked, showed that the profit from the prior year was actually closer to $ 30,000. Also, Travis fails to reveal that after completion near the end of the prior year of a local highway reconstruction project which housed many workers in the hotel, occupancy fell off dramatically. The first year of Austin's ownership nets a profit of less than $ 10,000. Around that time, Austin becomes aware of the prior lower profits and the effects of the completion of the highway project. He feels he has been defrauded. Austin wants Travis to return the purchase price and take back the hotel. Discuss whether Travis is required to give the funds back.

Identify and discuss the relevant legal issues and discuss them fully. Specifically state what you think the outcome will be and why. You will want to consider each element of the cause of action as well as defenses.