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Contracts-Fraud-Rescission For Non-Disclosure Of Insolvency, Sheridan Morgan

Michigan Law Review

Modern decisions have provided an important device for the protection of creditors through extension of the duty of disclosure by persons in extreme financial distress. The remedy chiefly used is rescission, which can be secured on the ground of "fraud," with restitution of property transferred in ignorance of the purchaser's distressed condition. The "fraud" need not consist of express misrepresentation of fact, though express misrepresentation often appears as an independent ground leading to the same result. The commercial importance of the remedies thus developed seems to justify consideration both of their practical consequences and of the theories on which relief …