Representation & Nondisclosure

Generally, when one enters into an agreement with a party, there are entitled to specific levels of disclosure on the part of the other party by law. This is done either at the request of the first party, under the guidelines covered by the standard of care, or else the party runs the risk of committing tortious negligence or fraud.

If these conditions are not met, and a party has been found to be maintaining a policy of nondisclosure, this can lead to charges of misrepresentation, and they can be used as the basis of a tortious action. Usually elements categorized as representing nondisclosure include terms that would directly effect the nature of the agreement, up to and including fraud.

In the case of legally binding agreement of representation (ones usually not covered by a contract, like accounting services), issues of nondisclosure can also include elements that would have directly effected the terms in which representation would be enacted, such as in cases where there could be found to be a conflict of interest, or a misrepresentation of abilities or inabilities (such as particular forms of certification, for example when someone claiming to be a certified accountant actually is not).

In many of these cases, certain non-disclosures are found to be able grounds to void an existing contract, and may entitle the wronged party to damages under tort law in the instances that losses have been incurred.

Often, cases of representation and nondisclosure enter into situations that specifically entail the transfer of property, products, or services, which are not covered

However, it remains that in many aspects in representation and nondisclosure, there is still a significant onus upon a buyer or client to request information themselves. In which case, the vendor of the product or service is required to provide full disclosure when asked, and must discuss, truthfully, elements that directly pertain to the representation of the product.

When willful nondisclosure occurs in the instance where a product or service is sold or transferred in the interest of exploiting the other party, it would typically represent a form of fraud, which could be susceptible to not only tortious complaint, but criminal as well.

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