With v O’Flanagan [1936] Ch 575

• Defendant sold a medical practice to Plaintiff disclosing its full value. However after disclosure and before the contract was signed circumstances rendered the practice worth far less.

• The changes of the situation weren’t disclosed and Plaintiff signed the contract. He sought rescission.

• CA granted Plaintiff rescission since that the representation was made to induce the purchasers accept and must be treated as continuing until the contract was signed, and that it was the duty of the vendor to communicate the change of circumstances to the purchasers. 

Lord Wright MR

• Generally there is no duty of disclosure, but changing situations do create such a duty. The burden of proving a duty exists lies on those claiming its existence.

• Cases where there is a duty of disclosure: fiduciary relationships, uberrimae fidei contracts, where a party makes a claim during negotiations which he later discovers to be false.

• The alternative basis (to the “duty” basis) for the decision is that the representation was continuous/ongoing, so that it was continually being made until the contract was signed.