When To Speak Up: Silence As Actionable Misrepresentation

As a general rule, silence will not lead to any legal liability. Indeed, the image of lawyers telling their clients "not to say a word" is part of almost every courtroom drama. In the context of contractual negotiations, however, it is important to verify that material statements made to the other side are accurate and comprehensive.

A Duty to Disclose

Generally in a contractual relationship between sophisticated parties there is no duty to disclose anything to the other side. Mere silence does not constitute misrepresentation. However, once a representation is made, as typically happens in the context of negotiations, it must be accurate. The Alberta Court of Queen's Bench in Opron Construction Co. v. Alberta has interpreted this act of making a representation as giving rise to a duty of disclosure. This duty is an ongoing obligation that extends beyond the negotiating table; any accidental misstatements must be clarified once they are discovered so that the other