Swinton v. Whitinsville Sav. Bank

1942 Massachusetts Supreme Judicial Court

• Bank sold Swintons house that was infested with termites without revealing the defect.
• Question was whether Bank had duty to disclose presence of termites–although there was no disclosure otherwise.
• Termites are not common in Massachusetts, thus court thinks Swintons would not be likely to ask.
• Sensible default rule: whether information known to one side would be suspected by other side.
• If there had been a fiduciary duty, court would be more likely to find duty to disclose.
• Court thinks duty to disclose is too idealistic–rules that contract was valid.
• There does not really seem to be a disincentive for seller to discover termites; they would have other reasons other than for setting price to sell house.
• Possible difference for new home builders: duty to disclose–resembles implied warranty of merchantability.

This case, together with the Kannavos v. Annino case, deals with situation where parties have different knowledge. Issue of default rule.

Author: international

Mentioned in these Entries

Kannavos v. Annino.