Also known as: concealment doctrine · doctrines of concealment · concealment
Written by attorneys · grounded in primary & secondary sources — see below
A tort doctrine that imposes liability for pecuniary loss on a party to a transaction who intentionally prevents the other from acquiring material information through concealment or other action. The conduct receives the same treatment as an affirmative false statement that the concealed matter does not exist.
Deborah Dunn sold her apartment building to Derek Douglas. Before Douglas toured the property, Dunn disconnected the basement sump-pump alarms to hide repeated flooding. Douglas bought the building without learning of the problem. When flooding later caused substantial water damage, Douglas recovered his pecuniary loss because Dunn's deliberate act prevented discovery of the material defect.
Denise Donovan missed the statute of limitations on Damian Decker's personal-injury claim. She paid Decker from her own funds and never disclosed the error or advised him to consult independent counsel. The disciplinary board found serious misconduct because Donovan's concealment of the malpractice claim went beyond ordinary negligence and involved dishonesty.
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Dominion Capital purchased a fleet of vehicles from Drake Logistics. Drake had repainted the cars to mask recurring paint defects but withheld internal reports showing the problem. When the defects surfaced and reduced the vehicles' value, Dominion recovered damages because Drake's concealment prevented discovery of the material information.
Active concealment requires an intentional act that prevents the other party from learning a material fact. Simple nondisclosure, by contrast, involves mere silence without any affirmative step to block discovery. The doctrine treats the former as equivalent to an affirmative misrepresentation.
The plaintiff must show that the defendant intentionally concealed material information during a transaction and that the concealment caused pecuniary loss. The loss is measured as if the defendant had affirmatively stated that the concealed matter did not exist.
The doctrine supplies a tort claim for fraudulent concealment. The same conduct can also render a contract voidable when the concealment functions as a misrepresentation that induces assent.
…the liability of the insurer, contain language to the effect that bad faith is the equivalent of dishonesty, fraud, and concealment. (See Critz v. Farmers Ins. Group, supra , 230 Cal.App.2d 788, 796; Palmer v. Financial Indem. Co. , 215 Cal.App.2d 419, 429 [30 Cal.Rptr. 204]; Davy v. Public National Ins. Co., supra ,…