LAW 505-002 – Contracts I
Restatement Second of Contracts § 161
When Non-Disclosure Is Equivalent to an Assertion
A person's non-disclosure of a fact known to him is equivalent to an assertion that the fact does not exist in the following cases only:
- where he knows that disclosure of the fact is necessary to prevent some previous assertion from being a misrepresentation or from being fraudulent or material.
- where he knows that disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party is making the contract and if non-disclosure of the fact amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.
- where he knows that disclosure of the fact would correct a mistake of the other party as to the contents or effect of a writing, evidencing or embodying an agreement in whole or in part.
- where the other person is entitled to know the fact because of a relation of trust and confidence between them.