Concealment and Misrepresentation

Question 1

Define: Concealment

Answer 1

Knowingly withholding a material fact in a contract negotiation

Question 2

Concealment

When must a seller disclose defects to a buyer?

Answer 2

Under caveat emptor the only time a defect must be disclosed is when there is proof of bad faith by the seller.

Question 3

Concealment

Rule from Kannavos v. Annino regarding rule to disclose info once partial disclosure has occured.

Answer 3

Once a party begins to disclose, they must disclose all relevant information. There is no duty to speak, but once they have spoken, they must speak honestly and divulge all material facts.

Question 4

Concealment

What is the rule about half-truths?

Answer 4

Fragmentary information may be misleading as active misrepresentation, and half-truths are actionable as whole lies.

Question 5

What is a material defect?

Answer 5

Anything that would affect the decision of a reasonable buyer

Question 6

Define: Misrepresentation in lay person and under RS 159

Answer 6

Using fragmentary information or half-truths to misconstrue material parts of the contract.
RS 159: A misrepresentation is an assertion that is not in accord with the facts.

Question 7

Define: Actionable misrepresentation and the exception

Answer 7

Misrepresentation which is of fact rather than of opinion.
Exception: Where there is a fiduciary relationship between the parties, where one party shows trickery, and where one party has superior knowledge that the other party may not have the ability to know if it is true.

Question 8

Generally a person is not held liable for an opinion, except:

Answer 8

Where there is a fiduciary relationship between the parties, where one party shows trickery, and one party has superior knowledge that the other party may not have the ability to know if it is true.