Restatement (2d) of Contracts § 161 When Non-Disclosure Is Equivalent To An AssertionA person’s non-disclosure of a fact known to him is equivalent to an assertion that the fact does not exist in the following cases only:(a) where he knows that disclosure of the fact is necessary to prevent some previous assertion from being a misrepresentation or from being fraudulent or material.(b) where he knows that disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party is making the contract and if non-disclosure of the fact amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.(c) where he knows that disclosure of the fact would correct a mistake of the other party as to the contents or effect of a writing, evidencing or embodying an agreement in whole or in part.(d) where the other person is entitled to know the fact because of a relation of trust and confidence between them.Restatement (2d) of Contracts § 162 When A Misrepresentation Is Fraudulent or Material(1) A misrepresentation is fraudulent if the maker intends his assertion to induce a party to manifest his assent and the maker(a) knows or believes that the assertion is not in accord with the facts, or(b) does not have the confidence that he states or implies is the truth of the assertion.(2) A misrepresentation is material if it would be likely to induce a reasonable person to manifest his assent, or if the maker knows that it would be likely to induce the recipient to do so.Restatement (2d) of Contracts § 163
When A Misrepresentation Prevents Formation Of A ContractFraud in the Factum or ExecutionIf a misrepresentation as to the character or essential terms of a proposed contract induces conduct that appears to be a manifestation of assent by one who neither knows nor has reasonable opportunity to know of the character or essential terms of the proposed contract, his conduct is not effective as a manifestation of assent.Restatement (2d) of Contract § 164 When A Misrepresentation Makes A Contract VoidableFraud in the Inducement(1) If a party's manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient.(2) If a party's manifestation of assent is induced by either a fraudulent or a material misrepresentation by one who is not a party to the transaction upon which the recipient is justified in relying, the contract is voidable by the recipient, unless the other party to the transaction in good faith and without reason to know of the misrepresentation either gives value or relies materially on the transaction.