(a) Make a false statement of material fact or law to a third person; or
(b) Fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.
Comment
Misrepresentation
[1] A lawyer is required to be truthful when dealing
with others on a client’s behalf, but generally has no affirmative duty
to inform an opposing party of relevant facts. A misrepresentation can
occur if the lawyer incorporates or affirms a statement of another person
that the lawyer knows is false. Misrepresentations can also occur by
failure to act. The term "third person" as used in paragraphs
(a) and (b) refers to any person or entity other than the lawyer’s client.
Statements of Fact
[2] This Rule refers to material statements of fact.
Whether a particular statement should be regarded as material, and as
one of fact, can depend on the circumstances. Under generally accepted
conventions in negotiation, certain types of statements ordinarily are
not taken as statements of material fact. Estimates of price or value
placed on the subject of a transaction and a party’s intentions as to
an acceptable settlement of a claim are in this category, and so is
the existence of an undisclosed principal except where nondisclosure
of the principal would constitute fraud. There may be other analogous
situations.
Fraud by Client
[3] Paragraph (b) recognizes that substantive law
may require a lawyer to disclose certain information to avoid being
deemed to have assisted the client’s crime or fraud. The requirement
of disclosure created by this paragraph is, however, subject to the
obligations created by Rule 1.6.
