Practice question
A director has an established duty to reveal a special material fact before purchasing a shareholder’s stock and deliberately withholds it. He argues only spoken lies can be fraudulent. Which is correct?
- Only oral words can ever constitute fraud
- Silence is categorically immune
- Only the share certificate’s color matters
- Article 1339 expressly addresses failure to disclose where a duty exists
- Every confidentiality relationship eliminates duties
Legal references
- Civil Code: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/53360; Articles 1338-1339,1344, applied to special-fact share-purchase disclosure.
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