Disclosure Duties
Generally, there is no duty to disclose information in contracts unless misrepresentation occurs, involving a false statement of fact inducing the other party to enter the agreement. Misstatements may be deliberate, negligent, or innocent, with varying consequences. Silence typically does not amount to misrepresentation, adhering to the principle of “buyer beware,” except in specific contexts like fiduciary relationships or insurance contracts. Fiduciaries must disclose all relevant facts, ensuring the “weaker” party is fully informed, often requiring independent advice.
Insurance contracts impose a duty of utmost good faith, obliging the insured to disclose all material facts affecting the risk. Misrepresentation or non-disclosure can render policies void. Similarly, contracts may impose disclosure obligations, such as warranties in share sales or statutory duties in securities listings.
EU consumer protection laws mandate extensive pre- and post-contractual information for distance and off-premises contracts. This includes key details about the trader, goods, pricing, and consumer rights, with failure to comply constituting an offence. On-premises contracts also require clear information disclosure, subject to exceptions for minor or immediate transactions.
In consumer finance, lenders must provide prescribed warnings, cooling-off periods, and detailed loan terms. Non-compliance can render agreements unenforceable unless the court deems it just to excuse breaches without consumer prejudice.
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