Shy Jackson considers the fine line between
non-disclosure and misrepresentation
It is a fact of life that many things are said when parties try to reach an agreement. The positive selling points of a proposed deal are highlighted, but little is said about its less attractive features. This is as true for large corporate transactions as it is for buying carpets in a Turkish bazaar. Many questions are asked and the ultimate decision about whether or not to enter into the bargain will be based largely on the answers given.
English law is clear about what happens when a false statement is made, but what if a party simply keeps quiet? This is what the House of Lords looked at recently in Hamilton and others v Allied Domecq plc [2007] UKHL 33, an appeal from a Scottish decision. Lord Rodger, who gave the only reasoned judgment, held that a failure by a party to speak on a point which the other party considered important was insufficient to establish a cause of action.
The claim arose in connection with Allied Domecq’s purchase of a shareholding in
