Opinion ID: 1192010
Heading Depth: 1
Heading Rank: 20

Heading: Bethlahmy and Tusch.

Text: This Court has held that a party to a contract has a tort duty, independent of the contract, to disclose to the other contracting party a fact that he knows may justifiably induce the other to act or refrain from acting. Restatement of Torts, 2d, § 551(1), as adopted by this Court in Tusch Enterprises v. Coffin, supra, and Bethlahmy v. Bechtel, supra. Yet, for some inexplicable reason, this Court did not even discuss in its current opinion the duties defined by the torts of constructive fraud and negligent nondisclosure. It is impossible to reconcile this Court's opinion in the Hudson case, with its earlier opinions in Tusch and Bethlahmy. In Bethlahmy, this Court found that the defendant home builder had a duty to disclose to a home buyer that there was a ditch running under the lot and garage of the house and that the basement was not of waterproof construction. This failure to disclose, in combination with the defendant's representation that the house would be a quality home, breached the duties defined by the common law of constructive fraud and negligent nondisclosure. The Court concluded that the plaintiff had the right to rescind the contract, because the defendant committed these torts. Similarly, this Court concluded in Tusch Enterprises, supra, that the seller had a tort duty under the common law of constructive fraud and negligent nondisclosure to disclose to the buyer that a duplex was built upon fill dirt and that problems with the duplex's foundation were likely to occur because of the use of the fill dirt. In Tusch, the Court also concluded that the plaintiff could not maintain a contract action based upon the breach of an express warranty, as the parol evidence rule precluded the introduction of any oral evidence to establish the making of an express warranty in derogation of the written agreement. Additional support for the holdings in Tusch and Bethlahmy is found in a very recent case Petry v. Spaulding Drywall, 117 Idaho 382, 788 P.2d 197 (1990), wherein this Court concluded that silence may be construed as a representation where the other party might be led to a harmful conclusion. Silence may be the basis for constructive fraud. (788 P.2d 199-200) Thus, Bethlahmy, Tusch and Hudson present the inherently contradictory decisions that a contracting party has a duty in tort to disclose matters deemed material to the making of the contract, but does not have a duty in tort to disclose his intent not to be bound by the contract. It is submitted that there is no fact more basic to the formation of a contract then the party's representation that he intends to be bound by the terms of the contract. If it constitutes fraud to make a promise without the intent to perform  how can it be argued seriously that the person making such promise has no duty in tort to disclose his intent not to be bound?