Legal Definitions - suppressio veri

suppressio veri refers to the deliberate suppression or concealment of a material truth. It is a legal concept that describes a type of fraud where one party intentionally fails to disclose important information that they have a duty to reveal, and which, if known, would likely influence another party's decision or action.

Here are some examples to illustrate this concept:

• Example 1: Real Estate Transaction

  A homeowner is selling their house and knows that the basement frequently floods during heavy rain, causing significant damage. During negotiations with a potential buyer, the buyer specifically asks if there have ever been any water issues in the basement. The seller, wanting to ensure the sale goes through, falsely states that the basement has always been dry and has never had any problems.

  How this illustrates suppressio veri: The seller deliberately withheld and misrepresented a critical piece of information (the recurring flooding) that was material to the property's value and the buyer's decision. By actively denying the issue, they suppressed the truth, which constitutes a form of fraud.

• Example 2: Business Acquisition

  A small tech startup is being acquired by a larger corporation. The startup's founders are aware that their flagship product, which is the primary reason for the acquisition, has a critical, unfixable software bug that will render it obsolete within six months. They intentionally omit this crucial information from all disclosure documents and discussions during the due diligence process.

  How this illustrates suppressio veri: The startup's founders suppressed the truth about a fundamental flaw in their core asset. This omission of a material fact was designed to mislead the acquiring corporation into believing the product had long-term viability, thus securing the acquisition under false pretenses.

• Example 3: Insurance Application

  An individual applies for a new health insurance policy. The application form asks about pre-existing medical conditions and recent diagnoses. The applicant was recently diagnosed with a serious chronic illness that would significantly increase their insurance premiums or even make them ineligible for coverage. They intentionally leave this section blank or falsely state they have no such conditions.

  How this illustrates suppressio veri: The applicant suppressed the truth about their health status, which is a material fact for an insurance company assessing risk and determining coverage terms. By failing to disclose this vital information, they sought to obtain insurance benefits under conditions they would not otherwise qualify for.