What did Colorado Ethics Opinion 80 require when opposing counsel made an obvious commercial-closing mistake that benefited the lawyer's client?
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This page answers the general question as of 1989. Ask about yours and see what the current Colorado Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
Revised Opinion 80 considered a buyer's settlement statement that mistakenly paid a seller substantially more than the contract required. Because a commercial closing consummated an existing agreement, the Committee concluded that approval, silence, or acceptance could communicate that the documents conformed to the deal. Where the mistake was undeniable and involved a basic term, accepting the benefit without disclosure would have been dishonest and a knowing misrepresentation under Rules 4.1 and 8.4(c).
The lawyer first had to explain the error and advise the client to disclose it. If the client persisted in nondisclosure, continued participation in the closing was prohibited and Rule 1.16 required withdrawal. Whether the lawyer also could or had to reveal the error depended on the lawyer's own prior statements and conduct. If that conduct amounted to a false representation or assisted client fraud, Rules 1.6(b), 4.1, and 8.4(c) could permit or require disclosure.
If the closing had already occurred, the opinion directed the lawyer to call on the client to rectify the overpayment. If the client refused, Rule 1.6(b)(4) could permit the lawyer to correct substantial financial injury caused by client fraud using the lawyer's services, and the lawyer's own misleading conduct could independently require correction. The opinion limited this conclusion to its commercial-closing facts and contrasted a past tax error that the lawyer had not helped create or perpetuate.
Currency note
This opinion was originally issued in 1989 and revised in July 2019 after Colorado's 2008 revisions to the Rules of Professional Conduct. Its result depended on the revised rules and on substantive contract, fraud, and agency principles identified in the opinion. Later cases, statutes, or rule amendments may have changed the analysis. Treat this page as historical context and verify current authority before relying on a specific disclosure decision.
Common questions
Q: Did every opposing-party mistake require disclosure?
A: No. The opinion addressed an undeniable mistake about a basic contract assumption where silence in the closing context would amount to a knowing misrepresentation.
Q: What if the client refused to disclose the mistake before closing?
A: The lawyer had to withdraw and stop participating in the closing. Additional disclosure depended on whether the lawyer's own conduct had become false, misleading, or assistance of fraud.
Q: What if the closing already occurred?
A: The opinion directed the lawyer to call on the client to rectify the overpayment. If the client refused, the lawyer could be permitted or required to disclose depending on client fraud and the lawyer's own conduct.
Q: Did confidentiality always prevent correction?
A: No. The opinion explained that Rule 1.6's confidentiality duty could yield to fraud-related exceptions and to Rules 4.1 and 8.4(c) when the lawyer's own statements or conduct required correction.
Background and rules framework
The revised opinion applied Colorado RPC 1.2(d) on assistance of client fraud, Rule 1.6 and its fraud exceptions, Rule 1.16 on withdrawal, Rule 2.1 on advising the client, Rule 4.1 on truthfulness to third persons, and Rule 8.4(c) on dishonesty, fraud, deceit, or misrepresentation.
Citations and references
Rules of Professional Conduct:
- Colo. RPC 1.2(d) (assisting criminal or fraudulent conduct)
- Colo. RPC 1.6(a), (b)(3), and (b)(4) (confidentiality and fraud-related disclosure)
- Colo. RPC 1.16 (withdrawal)
- Colo. RPC 2.1 (advisor)
- Colo. RPC 4.1 and 8.4(c) (truthfulness and dishonesty)
Statutes:
- C.R.S. § 4-1-304 (obligation of good faith)
- C.R.S. § 13-90-107(1)(b) (attorney-client privilege)
Cases:
- Morrison v. Goodspeed, 68 P.2d 458 (Colo. 1937), concealment and fraud
- In re Cisneros, 430 P.2d 86 (Colo. 1967), fraudulent nondisclosure
- People v. Schultheis, 638 P.2d 8 (Colo. 1981), client loyalty and false evidence
- Upjohn Co. v. United States, 449 U.S. 383 (1981), corporate attorney-client privilege
See also
Source
- Landing page: https://www.cobar.org/ethicsopinions
- Original PDF: Colorado Formal Ethics Opinion 80
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