Missouri Law Review
contract law, disclosure
This paper will examine some theoretical aspects of contractual non-disclosure and the related doctrine of unilateral mistake. These two legal rubrics are conceptually similar; each is concerned with the degree to which parties must communicate their understandings about the nature of the contract into which they are about to enter. If one party fails to reveal enough information, the other party may enter into the agreement under a misunderstanding and consequently may attempt to avoid contractual liability on the basis of mistake or on a theory of nondisclosure. The law of contracts clearly attaches a great deal of importance to ensuring that contracting parties have a mutual understanding about their agreement - a meeting of the minds - for that is the cornerstone of mutual assent. Indeed, one of the foundational theoretical goals of contract doctrine is to establish rules of law that will induce parties to reveal information that will reduce the cost of contracting and minimize the negative effects of breach. This “information forcing” concept has received substantial attention by many leading scholars as the animating principle behind the rule of Hadley v. Baxendale, which limits consequential damages to those that are foreseeable (i.e., those that have been communicated by the party seeking damages).
Michael Borden, Mistake and Disclosure in a Model of Two-Sided Informational Inputs, 73 Missouri Law Review 667 (2008)