## **Learning Outcomes**

After reading this article, you will be able to identify when a lawyer’s statements to others violate the duty of truthfulness, distinguish between statements of fact and permissible negotiation tactics, recognize when disclosure is required to avoid assisting a client’s crime or fraud, and apply these principles to MPRE-style scenarios.

## **MPRE Syllabus**

For the MPRE, you are required to understand the ethical obligations of lawyers when communicating with persons other than clients. This article focuses on:

- The prohibition on knowingly making false statements of material fact or law to third parties.
- The definition and scope of misrepresentation, including omissions and misleading statements.
- The distinction between statements of fact and acceptable negotiation “puffing.”
- The duty to disclose material facts to avoid assisting a client’s crime or fraud.
- The consequences of violating these rules, including discipline and potential civil liability.

## **Test Your Knowledge**

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision._

1. Which of the following is a lawyer prohibited from doing when negotiating on behalf of a client?
   a) Stating an opinion about the value of a claim.
   b) Knowingly making a false statement of material fact to the opposing party.
   c) Remaining silent about a client’s intent to settle for less than the stated amount.
   d) Declining to disclose a client’s bottom line in settlement talks.

2. A lawyer learns that a client intends to use the lawyer’s services to commit fraud. What must the lawyer do?
   a) Withdraw from representation only.
   b) Disclose the client’s intent to the opposing party in all cases.
   c) Disclose material facts if necessary to avoid assisting the fraud, unless prohibited by confidentiality rules.
   d) Take no action unless the fraud is completed.

3. Which of the following is NOT considered a misrepresentation under the Model Rules?
   a) Affirming another’s false statement.
   b) Omitting a material fact that makes a statement misleading.
   c) Stating a subjective estimate of value in a negotiation.
   d) Partially true but misleading statements.

## **Introduction**

Lawyers have a professional duty to be truthful in statements to others, including opposing parties, witnesses, and third persons. This duty is central to maintaining the integrity of the legal profession and the fairness of the legal process. The Model Rules of Professional Conduct prohibit lawyers from making false statements of material fact or law to third parties and from engaging in misrepresentation, whether by words or conduct.

> **Key Term: Truthfulness in Statements to Others**
> The ethical obligation requiring lawyers to avoid knowingly making false statements of material fact or law, or engaging in misrepresentation, when communicating with persons other than clients.

### Prohibition on False Statements

A lawyer must not knowingly make a false statement of material fact or law to a third person while representing a client. This includes direct falsehoods as well as affirming or incorporating another’s false statement.

> **Key Term: False Statement of Material Fact**
> Any statement that is untrue and relates to a significant or consequential matter in the context of the communication.

### Misrepresentation: More Than Just Lies

Misrepresentation includes not only outright falsehoods but also misleading statements, omissions, or conduct that creates a false impression. A lawyer may violate the rule by making partially true statements that are misleading or by failing to correct a misunderstanding caused by the lawyer’s prior statements or silence.

> **Key Term: Misrepresentation**
> Any communication or conduct by a lawyer that is false, misleading, or omits material facts, including affirming another’s false statement or creating a false impression.

### Statements of Fact vs. Negotiation Tactics

Not every statement made in negotiation or advocacy is a statement of fact. Under accepted negotiation conventions, certain statements are not considered material facts. These include estimates of price or value, a party’s intentions regarding settlement, and “puffing” or subjective opinions.

> **Key Term: Puffing**
> Statements of opinion, prediction, or subjective judgment in negotiation that are not generally taken as statements of material fact.

### Duty to Disclose to Avoid Assisting Crime or Fraud

A lawyer may be required to disclose a material fact to a third person if necessary to avoid assisting a client’s criminal or fraudulent act, unless such disclosure is prohibited by the duty of confidentiality. If withdrawal alone will not prevent the lawyer from assisting the client’s crime or fraud, disclosure may be required.

> **Key Term: Material Fact**
> A fact that a reasonable person would consider important in deciding how to act in the context of the communication.

### **Worked Example 1.1**

A lawyer represents a seller in a business transaction. During negotiations, the lawyer states, “This business is a gold mine; you’ll be making profits in no time.” In reality, the business has been losing money, but the lawyer does not disclose this fact. Is the lawyer subject to discipline for this statement?

> **Answer:** No. The lawyer’s statement is considered “puffing”—a subjective opinion about the business’s prospects, not a statement of material fact. However, if the lawyer had stated, “The business has been profitable for the last five years,” knowing this was false, that would be a disciplinable false statement of material fact.

### **Worked Example 1.2**

A lawyer represents a client in a real estate sale. The lawyer knows the property has a hidden defect but says nothing, and the buyer does not ask. The client intends to conceal the defect. Is the lawyer required to disclose the defect?

> **Answer:** If the lawyer’s silence would assist the client’s fraud, and withdrawal alone will not prevent it, the lawyer may be required to disclose the defect, unless confidentiality rules prohibit disclosure. If disclosure is not allowed, the lawyer must withdraw.

### **Exam Warning**

> The distinction between statements of fact and negotiation “puffing” is frequently tested. Do not assume all exaggerations are misrepresentations—only false statements of material fact or law, or misleading omissions, violate the rule.

### **Revision Tip**

> When in doubt, ask: Would a reasonable person rely on this statement as a fact? If yes, it is likely a material fact and must be truthful.

## **Key Point Checklist**

_This article has covered the following key knowledge points:_

- Lawyers must not knowingly make false statements of material fact or law to third parties.
- Misrepresentation includes misleading statements, omissions, and affirming another’s falsehood.
- Statements of opinion, value, or intent in negotiation (“puffing”) are not usually material facts.
- Disclosure of material facts may be required to avoid assisting a client’s crime or fraud, unless prohibited by confidentiality.
- Violations can result in professional discipline and, in some cases, civil liability.

## **Key Terms and Concepts**

- Truthfulness in Statements to Others
- False Statement of Material Fact
- Misrepresentation
- Puffing
- Material Fact

Truthfulness and respect for rights - Truthfulness in statements to others