1. Was the developers behavior ethical?
No the developers behavior wasn't ethical because I don't think that it is right for them to an old lady into selling her underwater land to them. Then the developers try to sell her land for more then ten times the amount that they paid her.
1a. How can this be avoided in the future?
To be completely honest I don't think that this can be avoided in the future because people are always going to be hoodwinking other people to get them to do what they want. One thing the lady could have done was get a estimate of how much the property costed before she decides to sell it.
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