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


Kimberly D. Krawiec


Duke University - School of Law

Kathryn Zeiler


Georgetown University Law Center

November 1, 2004

Georgetown Law & Economics Research Paper No. 614501; UNC Legal Studies Research Paper No. 04-4

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.

Number of Pages in PDF File: 92

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

JEL Classification: K12, K13, K41

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Date posted: November 26, 2004  

Suggested Citation

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

Contact Information

Kimberly D. Krawiec (Contact Author)
Duke University - School of Law ( email )
210 Science Drive
Box 90362
Durham, NC 27708
United States
Kathryn Zeiler
Georgetown University Law Center ( email )
600 New Jersey Avenue, NW
Washington, DC 20001
United States
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