ABSTRACT
Slade LJ: We begin with a statement of basic principle of the English law of contract: ‘Ordinarily, the failure to disclose a material fact which might influence the mind of a prudent contractor does not give the right to avoid the contract. The principle of caveat emptor applies outside contracts of sale. There are certain contracts expressed by the law to be contracts of the utmost good faith, where material facts must be disclosed; if not, the contract is voidable. Apart from special fiduciary relationships, contracts for partnership and contracts of insurance are the leading instances. In such cases, the duty does not arise out of contract; the duty of a person proposing an insurance arises before a contract is made, so of an intending partner.’ See Bell v Lever Bros Ltd [1932] AC 161, p 227, per Lord Atkin.
