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Active Concealment

Active concealment can cause a contract to be invalid or result in liability to the concealing party.  This is more than a failure to volunteer information.  Active concealment consists of hiding information from the other party by concealment.  For example, using the Smith and Jones house transaction as an example, suppose that Smith had painted over the cracks in the wall and the ceiling in order to hide the foundation problem. He would be guilty of active concealment and the contract could be rescinded, or Jones could recover damages from Smith in the amount of the foundation repair costs.

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