356 Mass. 42, 247 N.E.2d 708 (Mass. 1969)
Kannavos v. Annino is a foundational misrepresentation case that sharpens the line between mere silence (generally nonactionable) and active, misleading partial disclosures (actionable).
May purchasers rescind a real estate sale when the seller advertised and described the property as an income-producing, multi-family dwelling but failed to disclose that such use violated local zoning, notwithstanding that the zoning restriction was a matter of public record?
While a seller ordinarily has no general duty to disclose defects or legal impediments discoverable in public records, a party who chooses to speak about a material aspect of the transaction must do so truthfully and completely. Misleading half-truths or partial disclosures that create a false impression—especially about the lawfulness of an income-producing use—constitute actionable misrepresentation. A buyer's failure to discover the truth from public records does not bar rescission where the buyer reasonably relied on the seller's misleading statements or implications.
Yes. The seller's advertising and promotional statements about the property's multi-family, income-producing character—without disclosure of the zoning illegality—were misleading half-truths amounting to actionable misrepresentation. The purchasers were entitled to rescission with appropriate equitable adjustments.
Kannavos v. Annino crystallizes the modern approach to fraudulent and negligent misrepresentation in real estate transactions: there is no general duty to volunteer information, but one who speaks must not mislead. It is central to understanding how half-truths become actionable, how public-record availability does not immunize a misrepresenter, and why rescission is an appropriate equitable remedy. Law students use Kannavos to contrast silence (often nonactionable) with misleading statements or implications (actionable), and to see how courts fashion restitutionary remedies to unwind tainted deals.