Section .0400 - Transactions With Person Other Than Clients

Link to law: 27 - state bar/chapter 02 - rules of professional conduct of the north carolina state bar/27 ncac 02 rule 4.1.html
Published: 2015

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In the course of representing a client a lawyer shall not

knowingly make a false statement of material fact or law to a third person.





[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 partially true but misleading

statements or omissions that are the equivalent of affirmative false

statements. For dishonest conduct that does not amount to a false statement or

for misrepresentations by a lawyer other than in the course of representing a

client, see Rule 8.4.


Statements of Fact

[2] This Rule refers to statements of fact. Whether a

particular statement should be regarded 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 ordinarily in this

category, and so is the existence of an undisclosed principal except where

nondisclosure of the principal would constitute fraud. Lawyers should be

mindful of their obligations under applicable law to avoid criminal and

tortuous misrepresentation.


Crime or Fraud by Client

[3] Under Rule 1.2(d), a lawyer is prohibited from

counseling or assisting a client in conduct that the lawyer knows is criminal

or fraudulent. Ordinarily, a lawyer can avoid assisting a client's crime or

fraud by withdrawing from the representation. Sometimes it may be necessary for

the lawyer to give notice of the fact of withdrawal and to disaffirm an

opinion, document, affirmation or the like. In extreme cases, substantive law

may require a lawyer to disclose information relating to the representation to

avoid being deemed to have assisted the client's crime or fraud. Rule 1.6(b)(1)

permits a lawyer to disclose information when required by law. Similarly, Rule 1.6(b)(4)

permits a lawyer to disclose information when necessary to prevent, mitigate,

or rectify the consequences of a client's criminal or fraudulent act in the

commission of which the lawyer's services were used.


History Note:        Authority G.S. 84-23;

Eff. July 24, 1997;

Amended Eff. February

27, 2003.