Organ (P) entered into a contract with Laidlaw (D) to buy 111 hogheads of tobacco for $7.5k.
The sale took place the day after the War of 1812 ended and the blockade of New Orleans was discontinued.
P discovered that morning before the transaction that the blockade had ended so the price of tobacco would increase while the D did not know.
Before the transaction, D asked P if there was any news which might increase the price of tobacco. P remained silent.
After the sale, D heard the news and took back the tobacco he sold P.
P sued D to enforce the contract.
Procedural History:
Lower court found for P.
SCOTUS reversed, jury should have decided the issue of whether any imposition was placed by the buyer on the seller.
Issues:
If the buyer in an agreement has knowledge of any external factors that might affect the value of the goods in the exchange, is the buyer required to share this knowledge with the seller?
Holding/Rule:
A buyer is not required to share knowledge of any external factors that might affect the value of the goods in an exchange with the seller of those goods as long as there is no imposition of one party on the other.
Reasoning:
It would be hard to determine if the means of intelligence were equally accessible to both parties.
Each party should take care not to say or do any thing that would impose upon the other.
Law and ethics are separate -- the maxim caveat emptor would not be part of the law if they were bound together.
Dissent:
None.
Notes:
Can't trick or exploit the other person. "False fault" based notion. Don't have to disclose as long as you keep your mouth shut.
