Common Law Disclosure Duties and the Sin of Omission: Testing the Meta-Theories

Virginia Law Review, 2005

UNC Legal Studies Research Paper No. 04-4

Georgetown Law & Economics Research Paper No. 614501

92 Pages Posted: 26 Nov 2004 Last revised: 22 Jul 2016

See all articles by Kimberly D. Krawiec

Kimberly D. Krawiec

University of Virginia School of Law

Kathryn Zeiler

Boston University - School of Law

Date Written: November 1, 2004

Abstract

Since ancient times, legal scholars have explored the vexing question of when and what a contracting party must disclose to her counterparty, even in the absence of explicit misleading statements. This fascination has culminated in a set of claims regarding which factors drive courts to impose disclosure duties on informed parties. Most of these claims are based on analysis of a small number of non-randomly selected cases and have not been tested systematically. This article represents the first attempt to systematically test a number of these claims using data coded from 466 case decisions spanning over a wide array of jurisdictions and covering over 200 years.

The results are mixed. In some cases it appears that conventional wisdom is correct. For example, our data support the claim that courts are more likely to require disclosure of latent, as opposed to patent, defects. In addition, courts are more likely to require full disclosure between parties in a fiduciary or confidential relationship. On the other hand, our results cast doubt on much of the conventional wisdom regarding the law of fraudulent silence. Indeed, our results challenge ten of the most prominent theories that have been asserted to explain when courts will require disclosure. We find that courts are no more likely to impose disclosure duties when the information is casually acquired as opposed to deliberately acquired and that unequal access to information by the contracting parties is not a significant factor that drives courts to require disclosure. We do find, however, that when these two factors are present simultaneously courts are significantly more likely to force disclosure. Perhaps most interestingly, although it is generally understood that courts have become more likely to impose disclosure duties over time, we find that courts actually have become less likely to require disclosure over time.

Keywords: contract, tort, litigation, disclosure, common law, duty to disclose

JEL Classification: K12, K13, K41

Suggested Citation

Krawiec, Kimberly D. and Zeiler, Kathryn, Common Law Disclosure Duties and the Sin of Omission: Testing the Meta-Theories (November 1, 2004). Virginia Law Review, 2005, UNC Legal Studies Research Paper No. 04-4, Georgetown Law & Economics Research Paper No. 614501, Available at SSRN: https://ssrn.com/abstract=614501 or http://dx.doi.org/10.2139/ssrn.614501

Kimberly D. Krawiec (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

Kathryn Zeiler

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

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