Law School Case Brief
Stroup v. Conant - 268 Or. 292, 520 P.2d 337 (1974)
Not only are affirmative misrepresentations a basis for an action based upon fraud; half-truths and concealment of special knowledge may also provide such a basis when there is a duty to speak, and one undertaking to speak fails to tell or conceals the truth. When the purchaser undertakes to answer inquiries, he must tell the truth, and concealment under such circumstances is fraudulent.
Naomi Stroup filed a complaint seeking to rescind a lease with Dennis Conant based upon alleged misrepresentations by Conant regarding the type of business that would be conducted on the leased premises. Stroup claimed she was induced to enter into the lease in reliance upon a false representation by Conant that he intended to use the leased premises for the sale of watches, wallets, chains, and novelties. Instead, Conant operated an adult bookstore. Conant appealed the trial court's decree rescinding the lease.
Did the district court err in rescinding the lease?
The court here determined that there was sufficient basis to support the decision to rescind the lease, finding ample evidence of misrepresentation by half-truths and concealment of special knowledge, as well as Stroup’s reliance on those statements. Conant's claim that the Stroup was foreclosed from seeking to rescind the lease by not offering initially to return the rental payments could not be raised under a general denial.
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