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this possibility. Petitioner's failure to investigate
independently any of the enumerated potential uses of jojoba
plants was unreasonable under the circumstances.
Petitioner had no legal or agricultural background or
training; yet, he consulted no source of such information prior
to investing more than $30,000 in Utah I. At a minimum,
petitioner could have contacted an attorney to review the
offering, provide legal advice surrounding the partnership, and
explain the legal ramifications of the licensing agreement
canceling out the R & D agreement. A reasonable and ordinarily
prudent investor under the circumstances would have consulted an
attorney. Also, petitioner could have taken the simple step of
contacting the agricultural department of a nearby college or
university or going to another reliable source to inquire about
the research and development of jojoba plants and their potential
commercial usage, if any. Again, a reasonable and ordinarily
prudent investor would have at least attempted to make this type
of inquiry under the circumstances.10
Petitioner was not a naive investor and should have
recognized the need for independent professional advice. See
10 In Utah Jojoba I Research v. Commissioner, T.C. Memo.
1998-6, the Court noted that there were experimental jojoba
plantations located at the University of California at Riverside,
California, of which the general partner of Utah I, Mr. Kellen,
was aware.
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