In which of the following circumstances may a party's silence be actionable as nondisclosure?

• A. Only when the party engages in active concealment.
• B. Only when the party owes a fiduciary duty to the other party.
• C. When the party engages in active concealment or when the party owes a fiduciary duty to the other party.
• D. A party's silence cannot give rise to a misrepresentation.

Answer: (C)

In contract law, silence becomes actionable as nondisclosure only when there’s a duty to disclose or when concealment occurs. Active concealment means knowingly hiding a material fact or otherwise misleading by omission, which can amount to misrepresentation. A fiduciary relationship also creates a duty to disclose material information, so silence in that context can be actionable. Ordinary silence without a duty or concealment isn’t generally actionable. So, silence is actionable when there is active concealment or when a fiduciary duty to disclose exists.