BAKES, Justice.
This litigation arises out of a dispute over a land sale contract. Plaintiff-appellants Thomas and Lydia Russ, the vendees, brought this action against defendant-respondents Floyd and Jetta Brown, the vendors, to rescind the contract claiming misrepresentations made by the Browns concerning several matters, including the water rights on the property. The district court, sitting without a jury, entered judgment in favor of the vendors-Brown and allowed them to retain the amount paid on the contract by the vendees-Russ as the liquidated damages. We reverse the judgment of the trial court.
The Browns owned a bar-cafe and lodge complex known as the Wagontown Lodge located along the South Fork of the Boise River in Elmore County. In August, 1969, they entered into negotiations and ultimately a contract with the Russes for the [370]*370sale of Wagontown Lodge to the Russes for the sum of $45,000. The Russes paid $8,050 down and monthly installments of $236.12 from October, 1969, through August, 1970. During the negotiations, certain representations were made by the Browns regarding water rights from Grouse Creek and a ditch right to transport water over a neighboring property. That neighboring property, known as Paradise Plunge, is a similar commercial type property located across the road from the subject property.
On August 31, 1970, the day before an additional $5,000 payment was due, the Russes gave notice that they were rescinding the contract. They tendered the property back to the Browns and demanded the return of their $8,050 down payment. The Russes subsequently brought an action in district court seeking rescission of the contract and the return of their down payment. The Russes’ complaint alleged misrepresentation by the vendors which induced the vendees to enter into the contract of purchase. Those alleged misrepresentations concerned the average net income of the business, the acreage contained in the real property, the condition of the lodge equipment and the water and ditch rights for irrigation and domestic use. On appeal, plaintiffs abandoned all of the contentions in their complaint except that portion relating to the water rights.
The question presented on this appeal is whether the evidence sustains the trial court’s finding that there were no misrepresentations made by the Browns to the Russes concerning water rights on the Wagontown Lodge property. In this regard, it is established in this jurisdiction that, regarding the sale of property, although one may not be required to make representations regarding his property, once undertaking to do so he must fully disclose. This Court in Janinda v. Lanning, 87 Idaho 91, 390 P.2d 826 (1964), cited with approval the following statements:
“The rule decisive of the issue is stated in Restatement of Contracts, sec. 472, Comment b (1932):
“ ‘ * * * if a fact known by one party and not the other is so vital that if the mistake were mutual the contract would be voidable, and the party knowing the fact also knows that the other does not know it, non-disclosure is not privileged and is fraudulent.’
“And in Pashley v. Pacific Electric R. Co., 25 Cal.2d 226, 153 P.2d 325 (1944), quoting 12 R.C.L. § 71, p. 310, it is stated :
“ ‘Even though one is under no obligation to speak as to a matter, if he undertakes to do so, either voluntarily or in response to inquiries, he is bound not only to state truly what he tells but also not to suppress or conceal any facts within his knowledge which will materially qualify those stated. If he speaks at all he must make a full and fair disclosure.’ ” 87 Idaho at 96-97, 390 P.2d at 829.
See also Shrives v. Talbot, 88 Idaho 209, 398 P.2d 448 (1965). The Court in Janinda continued by citing Obde v. Schlemeyer, 56 Wash.2d 449, 353 P.2d 672 (Wash. 1960), which quoted the following excerpt from Keeton, Fraud-Concealment and Non-Disclosure, 15 Tex.L.R. 1 et seq. (1936):
“ ‘ “It is of course apparent that the content of the maxim ‘caveat emptor,’, used in its broader meaning of imposing risks on both parties to a transaction, has been greatly limited since its origin. When Lord Cairns stated in Peek v. Gurney, that there was no duty to disclose facts, however morally censurable their nondisclosure may be, he was stating the law as shaped by an individualistic philosophy based upon freedom of contract. It was not concerned with morals. In the present stage of the law, the decisions show a drawing away from this idea, and there can be seen an attempt by many courts to reach a just result in so far as possible, but yet maintaining the degree of certainty which the law must have. The statement may often be found that if either party to a contract of sale conceals or suppresses a material [371]*371fact which he is in good faith bound to disclose then his silence is fraudulent.
“ ‘ “The attitude of the courts toward non-disclosure is undergoing a change and contrary to Lord Cairns’ famous remark it would seem that the object of the law in these cases should be to impose on the parties to the transaction a duty to speak whenever justice, equity, and fair dealing demand it.” ’ ” 87 Idaho at 97-98, 390 P.2d at 830.
The record discloses in this case that the Russes talked with the Browns about water and ditch rights appurtenant to the property in question. The vendee Russ testified that Mr. Brown expressly stated that the property had water rights1 and that nothing was said by Brown regarding other persons adversely claiming the water rights to Grouse Creek.2 Mrs. Russ testified that both Mr. and Mrs. Brown stated that the property had water and there was no reference made whatsoever about the water or ditch rights being contested.3 The record on appeal clearly reveals that prior to the time of the sale of the Wagontown Lodge property to the Russes there was a dispute over the Grouse Creek water that fed the well and was used for irrigation on the Wagontown Lodge grounds, and that the Browns failed to reveal this dispute when negotiating the sale of the property. In 1966, the owners of the property across the highway from the Wagontown Lodge, through which the Wagontown Lodge’s access crossed, diverted all of the water out of Grouse Creek in order to cool the water in their hot water swimming pool. This diversion interfered with the water flowing down the ditch to the Wagontown Lodge. Thereafter, the property across the highway was sold to one Willis Carrie who claimed water rights for that property in Grouse Creek adverse to the rights of the Wagontown property. In December, 1969, in the process of building a new road across his property, Carrie plowed out the ditch across the property which furnished water to the Wagontown property. The record indicates that both Carrie and his predecessor had at times contested the rights of the vendors Brown to maintain that ditch. (Brown Depo., p. 40). These disputes as to the water and ditch rights were known to the vendor Floyd Brown prior to selling his property to the vendees, Russes.
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BAKES, Justice.
This litigation arises out of a dispute over a land sale contract. Plaintiff-appellants Thomas and Lydia Russ, the vendees, brought this action against defendant-respondents Floyd and Jetta Brown, the vendors, to rescind the contract claiming misrepresentations made by the Browns concerning several matters, including the water rights on the property. The district court, sitting without a jury, entered judgment in favor of the vendors-Brown and allowed them to retain the amount paid on the contract by the vendees-Russ as the liquidated damages. We reverse the judgment of the trial court.
The Browns owned a bar-cafe and lodge complex known as the Wagontown Lodge located along the South Fork of the Boise River in Elmore County. In August, 1969, they entered into negotiations and ultimately a contract with the Russes for the [370]*370sale of Wagontown Lodge to the Russes for the sum of $45,000. The Russes paid $8,050 down and monthly installments of $236.12 from October, 1969, through August, 1970. During the negotiations, certain representations were made by the Browns regarding water rights from Grouse Creek and a ditch right to transport water over a neighboring property. That neighboring property, known as Paradise Plunge, is a similar commercial type property located across the road from the subject property.
On August 31, 1970, the day before an additional $5,000 payment was due, the Russes gave notice that they were rescinding the contract. They tendered the property back to the Browns and demanded the return of their $8,050 down payment. The Russes subsequently brought an action in district court seeking rescission of the contract and the return of their down payment. The Russes’ complaint alleged misrepresentation by the vendors which induced the vendees to enter into the contract of purchase. Those alleged misrepresentations concerned the average net income of the business, the acreage contained in the real property, the condition of the lodge equipment and the water and ditch rights for irrigation and domestic use. On appeal, plaintiffs abandoned all of the contentions in their complaint except that portion relating to the water rights.
The question presented on this appeal is whether the evidence sustains the trial court’s finding that there were no misrepresentations made by the Browns to the Russes concerning water rights on the Wagontown Lodge property. In this regard, it is established in this jurisdiction that, regarding the sale of property, although one may not be required to make representations regarding his property, once undertaking to do so he must fully disclose. This Court in Janinda v. Lanning, 87 Idaho 91, 390 P.2d 826 (1964), cited with approval the following statements:
“The rule decisive of the issue is stated in Restatement of Contracts, sec. 472, Comment b (1932):
“ ‘ * * * if a fact known by one party and not the other is so vital that if the mistake were mutual the contract would be voidable, and the party knowing the fact also knows that the other does not know it, non-disclosure is not privileged and is fraudulent.’
“And in Pashley v. Pacific Electric R. Co., 25 Cal.2d 226, 153 P.2d 325 (1944), quoting 12 R.C.L. § 71, p. 310, it is stated :
“ ‘Even though one is under no obligation to speak as to a matter, if he undertakes to do so, either voluntarily or in response to inquiries, he is bound not only to state truly what he tells but also not to suppress or conceal any facts within his knowledge which will materially qualify those stated. If he speaks at all he must make a full and fair disclosure.’ ” 87 Idaho at 96-97, 390 P.2d at 829.
See also Shrives v. Talbot, 88 Idaho 209, 398 P.2d 448 (1965). The Court in Janinda continued by citing Obde v. Schlemeyer, 56 Wash.2d 449, 353 P.2d 672 (Wash. 1960), which quoted the following excerpt from Keeton, Fraud-Concealment and Non-Disclosure, 15 Tex.L.R. 1 et seq. (1936):
“ ‘ “It is of course apparent that the content of the maxim ‘caveat emptor,’, used in its broader meaning of imposing risks on both parties to a transaction, has been greatly limited since its origin. When Lord Cairns stated in Peek v. Gurney, that there was no duty to disclose facts, however morally censurable their nondisclosure may be, he was stating the law as shaped by an individualistic philosophy based upon freedom of contract. It was not concerned with morals. In the present stage of the law, the decisions show a drawing away from this idea, and there can be seen an attempt by many courts to reach a just result in so far as possible, but yet maintaining the degree of certainty which the law must have. The statement may often be found that if either party to a contract of sale conceals or suppresses a material [371]*371fact which he is in good faith bound to disclose then his silence is fraudulent.
“ ‘ “The attitude of the courts toward non-disclosure is undergoing a change and contrary to Lord Cairns’ famous remark it would seem that the object of the law in these cases should be to impose on the parties to the transaction a duty to speak whenever justice, equity, and fair dealing demand it.” ’ ” 87 Idaho at 97-98, 390 P.2d at 830.
The record discloses in this case that the Russes talked with the Browns about water and ditch rights appurtenant to the property in question. The vendee Russ testified that Mr. Brown expressly stated that the property had water rights1 and that nothing was said by Brown regarding other persons adversely claiming the water rights to Grouse Creek.2 Mrs. Russ testified that both Mr. and Mrs. Brown stated that the property had water and there was no reference made whatsoever about the water or ditch rights being contested.3 The record on appeal clearly reveals that prior to the time of the sale of the Wagontown Lodge property to the Russes there was a dispute over the Grouse Creek water that fed the well and was used for irrigation on the Wagontown Lodge grounds, and that the Browns failed to reveal this dispute when negotiating the sale of the property. In 1966, the owners of the property across the highway from the Wagontown Lodge, through which the Wagontown Lodge’s access crossed, diverted all of the water out of Grouse Creek in order to cool the water in their hot water swimming pool. This diversion interfered with the water flowing down the ditch to the Wagontown Lodge. Thereafter, the property across the highway was sold to one Willis Carrie who claimed water rights for that property in Grouse Creek adverse to the rights of the Wagontown property. In December, 1969, in the process of building a new road across his property, Carrie plowed out the ditch across the property which furnished water to the Wagontown property. The record indicates that both Carrie and his predecessor had at times contested the rights of the vendors Brown to maintain that ditch. (Brown Depo., p. 40). These disputes as to the water and ditch rights were known to the vendor Floyd Brown prior to selling his property to the vendees, Russes.
By his own admission in a deposition taken May 11, 1971, which was admitted [372]*372into evidence, vendor Floyd Brown admitted that the Russes inquired as to water rights on the property4 and that he told the Russes that they had rights to the water from Grouse Creek.5 Although Brown admitted that he told the Russes that water had been running through that ditch for at least “60 years, and that it had established its own right,” Brown was not certain whether he had told the Russes that he had had some difficulty with the water rights in question.6 Brown stated that although he may have discussed water rights with the Russes he could not be certain in what detail, if at all, he discussed the water rights problem.7 Mrs. Brown testified that while they had had problems with the prior owners of the Paradise Plunge that nothing was said to the Russes about it.8
Prior to the Russes’ involvement in the Wagontown Lodge property, Willis Carrie and his predecessor interfered with the water rights involved in the present case. In his deposition, Floyd Brown admits that he had discussed the water and ditch problem with both Carrie and Carrie’s predecessor on a number of occasions and had supposedly reached an agreement.
Evidence of the existing dispute over the water and ditch rights is further evidenced by the fact that several months after the Russes had attempted to rescind the contract Mrs. Brown entered into an easement agreement with Carrie on May 4, 1971. Even though the Russes had attempted to rescind the contract, Mrs. Brown, who was contending that the Russes could not rescind the contract, nevertheless entered [373]*373into a ditch easement agreement, an act inconsistent with her position that the Russes were bound on the contract. Contrary to the trial court’s ruling that this agreement settled the water dispute, the agreement did nothing to settle the dispute over the water rights but was merely an agreement for the creation of an easement permitting water to be carried from Grouse Creek over Carrie’s property to the Wagontown Lodge property. This agreement pointedly demonstrates that a serious dispute existed which the Browns knew of, but which they failed to disclose to the purchasers. The record clearly discloses the presence of an existing dispute over water and ditch rights to the water in Grouse Creek prior to the Russes becoming involved in negotiations to purchase the Wagontown Lodge property. Under the disclosure doctrine of Janinda v. Lanning, supra, the sellers had a duty to fairly and fully disclose to the buyers the existence of a contest of the water and ditch rights. The Russes testified that the first time they knew of the water right dispute was when the water was cut off by Mr. Carrie.9
This Court has held that the trial court must accept as true the positive, uncontradicted testimony of a credible witness, unless his testimony is inherently improbable or impeached. Hook v. Horner, 95 Idaho 657, 517 P.2d 554 (1973); Olsen v. Hawkins, 90 Idaho 28, 408 P.2d 462 (1965). In the present case the Russes testified that the Browns made no disclosure of the existing water problems and this testimony was not contradicted by the Browns, nor was it impeached. Therefore, the trial court should have ruled as a matter of law that the Browns did not fully or fairly disclose to the purchasers the past and pending water disputes with Mr. Carrie and his predecessors. Under the disclosure doctrine enunciated in Janinda v. Lanning, supra, the Browns had a duty, once they embarked upon discussing water rights, to fully and fairly reveal and disclose all the facts, including the problems relating to the water and ditch rights. A reading of the record clearly indicates that the Browns did not reveal or disclose the water and ditch right problem as required by the law as set forth above.
That the Russes relied upon the representations of the Browns regarding water and ditch rights is apparent from their testimony. They were entitled to rely upon the representations of the seller. As stated in Shrives v. Talbot, supra:
“Such findings infer that defendants should not have relied upon statements made by the plaintiffs. •'However, the rule is otherwise. Plaintiff Shrives may not have been required to speak, but when he did speak it was his duty to state the facts fully and correctly, or to advise defendants that he did not know the facts. As to matters concerning which Shrives did make representations, defendants were under no obligation to make an independent investigation or to inquire of plaintiff’s prior tenants.” 88 Idaho at 215, 398 P.2d at 451.
The Court also said:
“In Summers v. Martin, 77 Idaho 469, 295 P.2d 265 (1956), and in Fuchs v. Lloyd, 80 Idaho 114, 326 P.2d 381 (1958), this court again held that it was incumbent upon the vendor to know the truth of the facts of which he spoke, and that the purchaser was entitled to rely upon representations made by the vendor.” 88 Idaho at 216, 398 P.2d at 452.
Under the prior cases of this Court, it is not necessary that the failure to fully disclose the water dispute be done with fraudulent intent in order to justify rescission by the vendee. Fuchs v. Lloyd, 80 Idaho 114, 326 P.2d 381 (1958); Summers v. Martin, 77 Idaho 469, 295 P.2d 265 (1956).
Judgment reversed and remanded to the district court with instructions to enter a judgment in favor of plaintiffs for rescission of the contract and return of the $10,-646 total consideration which the court found the plaintiffs to have paid. From [374]*374the foregoing the defendants shall be entitled to offset only the following items found by the district court in its memorandum opinion: $578.68 for repair of the premises; $1,800.00 in the reduction of the inventory; and $4,950.00 for the reasonable rental value of the premises for eighteen months. In addition the district court may make such other setoffs or allowances, if any, which the court determines that either party is equitably entitled to as a result of this Court’s action in allowing plaintiffs’ rescission of the contract.
Costs to appellant.
DONALDSON and McQUADE, JJ., concur.