Buyers of a property in which severe dampness defects were discovered contended that the sellers did not make full and proper disclosure of the condition of the property prior to the sale, while the sellers contended that they made sufficient disclosure by saying that the property had been repaired in the past and referred the buyers to the contractor for further information.
The Court held that the sellers did not comply with the duty of disclosure imposed on sellers of a property. The test of the veracity of the representation is substantial, not verbal; Saying a "half-truth" may be considered not only misleading by omission, but also deception in the act, and any disclosure of material information should also be reflected in the purchase agreement after the disclosure. Failure to disclose material data that is obligated to be disclosed at the pre-contractual negotiation stage may give rise to a party injured by the non-disclosure seeking to terminate the contract due to fraud in the inducement or provide grounds for compensation due to lack of good faith in the negotiations. Allowing apartment buyers to bring an inspector on their behalf does not exempt the sellers from the duty of disclosure that applies to them by law, and the buyers are entitled to perform an examination on their behalf but are not obligated to do so, which does not constitute a waiver of the sellers' duty of disclosure. Here, the sellers made a partial, bordering on fraudulent, representation to the buyers by disclosing that there were dampness issues that had been solved, while knowing that these were substantial and recurring problems that did not pass the test at the time of sale. This is material information that was important to the buyers' decision regarding the purchase of the property, and therefore the buyers are entitled to compensation.