Laidlaw v. Organ
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| Laidlaw v. Organ | ||||||||||||
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| Decided March 15, 1817 |
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| Holding | ||||||||||||
| Court membership | ||||||||||||
| Chief Justice: John Marshall Associate Justices: Bushrod Washington, William Johnson, Henry Brockholst Livingston, Thomas Todd, Gabriel Duvall, Joseph Story |
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| Case opinions | ||||||||||||
| Majority by: Marshall Joined by: unanimous |
Laidlaw v. Organ, 15 U.S. 178 (1817), is a case decided by the United States Supreme Court.
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[edit] Facts
Organ purchased 111 hogsheads of tobacco (111,000 pounds) from Laidlaw Co. on February 18, 1815. The purchase was made between 8 and 9am on the same day that news broke that a peace treaty had been accepted between America and Britain lifting a naval embargo that drastically affected the price of tobacco by 30 to 50 percent (Treaty of Ghent). Organ was aware of the lifting of the embargo while Laidlaw was not. During the discussion of the contract Organ was asked if he was aware of any reasons for the price to be higher. Organ stayed silent over the news of the embargo lifting. Two days later, on the 20th, Laidlaw & Co. repossessed the tobacco by force from Organ. Organ filed suit for breach of contract to regain the tobacco or be awarded damages.
[edit] Procedural History
The trial court charged the jury to find for the plaintiff (Organ).
[edit] Holding
Chief Justice Marshall's unamimous opinion can be interpreted to state that withholding information that is calculated to deceive the other party can cause a contract to be void on equitable grounds. However, on the question of whether Organ had an obligation to disclose the information he had obtained about the end of the war, the opinion declares that "[t]he court is of opinion that he was not bound to communicate it."
Marshall's opinion goes on to state that "[i]t would be difficult to circumscribe the contrary doctrine within proper limits, where the means of intelligence are equally accessible to both parties. But at the same time, each party must take care not to say or do any thing tending to impose upon the other."
The case was remanded to the District court of Louisiana, with directions to award a Venire facias de novo. The court stated the question of equitable relief should have been submitted to a jury and that Laidlaw is entitled to a new trial. Chief Justice Marshall's opinion was brief, at approximately 120 words.
[edit] Significance of the case
Laidlaw has been recognized by U.S. legal scholars as a central case in the history of U.S. contract law. It was the first case in which the Supreme Court adopted the rule of caveat emptor[1] and "was one of the first cases to come before the [Supreme] Court involving a contract for future delivery of a commodity." [2] This is also the first case that starts to articulate a doctrine of forbidding active concealment.
Laidlaw has been cited by over a hundred cases, and maintains great importance in U.S. legal scholarship and education (including law school Contracts courses). [3]
[edit] Quote
"[E]ach party must take care not to say or do anything tending to impose upon [i.e. take advantage of] the other" -Marshall
[edit] See also
[edit] References
- ^ Kaye, Joshua. "Disclosure, Information, the Law of Contracts, and the Mistaken Use of Laidlaw v. Organ." Unpublished. 2007. p. 2. http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=joshua_kaye
- ^ Morton J. Horwitz. The Transformation of American Law: 1780-1860. 1977. p. 182.
- ^ Kaye, loc. cit.
[edit] External links
- Full Text Opinion (on Justia)
