Contract Uberrimae Fidei are contracts of absolute good faith where there is a duty to disclose all material facts which are in the knowledge of one party. Failure to disclose such information will render the contract voidable at the option of the other party.
|
Examples of Contract Uberrimae Fidei are as follows:
- Contract of insurance of all kinds-the assured must disclose to the insurer all material facts and whatever he states must be correct and truthful
- Company prospectus-when a company invites the public to subscribe for its shares, it is under statutory obligation to disclose truthfully the various matters set out in the Companies Act. Any person responsible for non-disclosure is liable to damage. Also the contract to buy shares is voidable where there are material false statement or non-disclosure in the prospectus.
- Contract for the sale of land-the vendor is under a duty to the purchaser to show good title to the land he or she has contract to sell
- Fiduciary relationship- example of such relationships are principal and agent, solicitor and client, trustee and beneficiary
- Contract of marriage engagement-every material fact must be disclosed by both the parties to a contract of marriage otherwise the other party is justified to break off the engagement
- Contract of family settlement-also require full disclosure of all material facts within the knowledge of the parties to such contracts. Such a contract is not binding if either party has been misled by the concealment of material facts.
|