Duty to Disclose information

Suppose that party X is entering a contract involving the purchase of some goods with party Y and party X is well aware with some information on the goods in which party Y has no knowledge at all. The information on the goods may contain certain material facts in this situation in which it will either alter or trigger the final decision of party Y to either proceed with the contract or not. Does party X has the duty to disclose the material facts to party Y? To what extent and in what circumstances must party X disclose such information? Unlike many other legal systems, the English law has taken the traditional perception that parties to a proposed contract generally have no duty to disclose information to each other.1 Each party must evaluate their own judgment in deciding whether to enter into a contract and it is not the duty of either one of the parties to notify each other about the facts which may influence their decision. Therefore, it is held that a landlord is not liable in deceit if he fails to inform the tenant that the house is in its ruinous condition before the landlord let the house out.2 If a duty of disclosure generally did exist, it would be very hard to imply exactly what must be disclosed in any particular case3. This traditional approach is functional but it should be kept in mind that the issue here is not whether party X must disclose but rather whether party X can contract with party Y without making disclosure. For example in a given situation, if A refuses to contract with B, A has no legal duty to supply information to B although she has certain information that would be very valuable to B. The next point is, if the burden is on the knowing party, A, the issue here is disclosure but if the burden is on the unaware party, B, then the issue will be on mistake.4 According to Professor Collins H, the judges in English court are more likely to acknowledge the existence of a duty of disclosure in a narrower scope. First, by supplying