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Question: 1. Return to the case of Laidlaw v. Organ. List the ways in which Organ's information might be productive. Explain how Organ's information might be redistributive. What do you conclude about whether or not efficiency requires enforcing the contract?
2. A large number of cases involve a dispute about whether a mistake was mutual or unilateral concerning the quality of the object or its value. In a famous case, Sherwood v. Walker; 66 Mich. 568, 33 N.W. 919 (Mich. 1887), the seller (Walker) promised to deliver a cow to the buyer (Sherwood). The seller, who apparently believed that the cow was incapable of becoming pregnant, learned before the delivery was to take place that the cow was pregnant. A pregnant cow is far more valuable than a barren cow. The seller refused to deliver the cow to the buyer as promised. He contended that the contract was premised on the mutual mistake that the cow was barren. The buyer denied that he had made such a mistake.
a. The knowledge that a cow is fertile, rather than barren, is productive, rather than merely redistributive. Why?
b. Suppose the law imposed on Sherwood (the plaintiff-buyer) the duty to disclose to Walker (the defendant-seller) any evidence that the cow is fertile. Would there be an objection to such a duty on efficiency grounds?
c. Should it matter in this case that Walker was a professional cattle rancher and that Sherwood was a banker?
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