18.2Negotiating without lying (Rule 4.1)

Quick review — Rule 4.1 truthfulness (taught fully in Chapter 16)

Four points — the line between them is puffery.

• No knowing false statement of material fact or law to a third person in the representation; the negotiation setting provides no cover. A misrepresentation can also occur through a partially true but misleading statement, or an omission that is the equivalent of an affirmative false statement (cmt [1]).
• Puffery — price/value estimates, settlement intentions, existence of an undisclosed principal (unless nondisclosure itself is fraud) — is ordinarily not "material fact"; specific objective assertions about facts, conditions, or history are.
• No general duty to volunteer unfavorable facts or to correct the other side's misapprehension — generally, because Rule 4.1(b) in the next bullet is itself an affirmative duty to disclose. Where the misapprehension traces back to something the lawyer or the client said or did, the duty to correct revives.
• Rule 4.1(b): failing to disclose a material fact to a third person violates the rule where speaking is necessary to keep from assisting a client's crime or fraud — unless Rule 1.6 forbids that disclosure, in which case the lawyer must withdraw, and sometimes must also give notice of the fact of withdrawal and disaffirm an opinion, document, affirmation or the like (cmt [3]).