On Silence As Fraud

Both in continental and Anglo-American law system, silence can lead to fraud which has become an indisputable fact. However, there is a lot of controversy on how to determine it. The reason is that there are different opinions when the parties have informing obligation. In China, this problem becomes particularly sharp. In view of this, this article focus on informing obligation, trying to explore why and when there is informing obligation, to solve the problems why the silence can lead to fraud and how to determine silence as fraud. Except for a preface and a conclusion, this article consists of three chapters.Chapter 1 discusses two issues. One of them is to define the key concepts involved in this article, so as to clarify intrinsic and extrinsic of the concept, and to find the differences between these key concepts and its similar concepts. The other one is to sort out the profile of the current legislation, judicial and academic research, the result of which is that the legislation keeps silence, judicial rules are rather vague, and scholars have no further discussion on it.Chapter 2 focuses on some countries'representative legislative and academic research about silence as fraud and get the result of two "coherence" and one "tendency". The first "agreement" is that silence can lead to fraud. The second "agreement" is that there exists a huge controversy on how to determine silence as fraud. One "tendency" means that the scope of informing obligation has been broadened in these countries, which implies that the requirements of human nature have been raised in the view of law.Chapter 3 is the core of this article. It discusses why silence can lead to fraud and how to determine this point. Because of the close ties between silence as fraud and informing obligation, this chapter puts up analysis from the perspective of informing obligation. In my opinion, it is the principle of good faith and the asymmetric information that makes the theory foundation of silence as fraud. And we should determine silence as fraud from the legal perspective of interest balance and the economics perspective of information nature analysis.