Allgemein

Section 17 Indian Contract Act Definition

Mere silence in any situation that may affect a person`s willingness to enter into a contract is not fraud, unless circumstances become the duty of the person who is silent to speak. Failure to disclose a fact must not lead to fraud. We can understand this with a case law in Shri Krishan vs Kurukshetra University, a candidate for the L.L.B Part 1 exam was not present and did not mention it in his exam form. The university authorities and the head of the legal department paid little attention to it and did not ask for more information. In that case, the Supreme Court ruled that there had been no fraud on the part of the applicant and that the university was not allowed to cancel his application for that reason. Description: „Fraud“ means and includes any of the following acts committed by or with his acquiescence or by his representative1 with the intention of deceiving another party of his representative or inducing him to enter into the Contract:— (1) the suggestion of what is not true as done, by someone who does not believe, that it is true; (2) the active concealment of a fact by a person who has knowledge or believes in the fact; (3) a promise made without the intention of carrying it out; (4) any other act likely to be deceived; (5) any act or omission specifically declared fraudulent by law. Explanation: Mere silence on facts that could affect a person`s willingness to enter into a contract is not fraud, unless the circumstances of the case are such that, having regard to those facts, it is the person`s duty to remain silent2 or unless his silence is in itself synonymous with speech. Illustrations (a) A sells B at auction a horse that A knows is not healthy. A says nothing to B about the poor health of horses. This is not a scam in A. (b) B is a girl and has just reached adulthood. Here, the relationship between the parties would make it obligatory to tell B if the horse is not healthy.

(c) B says to A, „If you don`t deny it, I guess the horse is healthy.“ A says nothing. Here, since silence is synonymous with speech. (d) A and B enter into a contract as contractors. A has private information about a price change that would affect B`s willingness to continue the contract. A is not obliged to inform B. 1. See p. 238, infra. 2.

See p. 143 below. The main difference between fraud and misrepresentation is that in the first case, the person making the proposal does not believe that it is true, and in the other case, he believes that it is true, although in both cases it is a misrepresentation of the fact that misleads the promisor. This took place in Rattan Lal Ahluwalia against Jai Janider Parshad. Under the common law, fraud not only renders the contract voidable at the choice of the party whose consent has been obtained, but also results in a claim for damages for deception. Silence in a contract, which may affect a person`s willingness to enter into a contract, does not constitute fraud as long as the circumstances are not different. We will discuss this in detail in this article. A contract in which such an obligation arises is uberrima fides, i.e. a contract concluded in good faith. An example would be an insurance contract, where it is the duty of the insured person to inform the insurance agent of all relevant facts about the risk to be covered. It must be absolute good faith on the part of the insured.

The insured has the obligation to disclose all relevant facts to the insurer so that it can take into account whether or not the proposal is accepted. Mere silence on facts that could affect a person`s willingness to enter into a contract is not fraud, unless the circumstances of the case are such that, having regard to their facts, it is the duty of the person to remain silent, to speak, or unless his silence is in itself synonymous with speech. Figure – A sells B a horse that A knows is not healthy, A says nothing to B about the horse`s poor health. This is not fraud in case A. In R.C.Thakkar v. Bombay Housing Board (1972), false estimates were made in a tender. The contractor, believing that the estimate was correct, reduced costs. The court ruled that the information provided in the offer constituted a misrepresentation. The defendants could not argue themselves that the plaintiff could have calculated the actual costs with reasonable effort.

Each party to a marriage contract is required to disclose all essential facts. If the exact facts are not disclosed, the other party may cancel the undertaking and cancel the contract. In Anurag Anand v. Sunita Anand (1996), caste, income, age, nationality, religion, educational qualifications, marital status and financial status were considered essential facts and circumstances. In a contract, there is usually an obligation to talk about a party, active concealment is a situation in which that party conceals the fact that it has an obligation to disclose. Active concealment and passive concealment are two different things, passive concealment refers to situations from the past where the party had the duty to speak and remained silent. In our daily lives, we use the term fraud to refer to a person who intended to deceive others, defined in legal terms Section 17 of the Indian Contracts Act, 1872 defines fraud as any act involving any of the following acts committed by or with his consent or by his representative with the intention of: deceive another party or its representative: with the intention of deceiving another party or its representative or inducing it to enter into the contract – Active concealment is a situation in which a party conceals essential information related to the contract, although it is obliged to disclose this information. In simpler terms, it is the failure to disclose private information.

It is more than just a passive veil, that is, it requires an open act of obfuscation. It is important to note that the passive obfuscation mentioned above means silence. The article clarifies that, although mere silence does not constitute fraud, it may constitute fraud in situations where the party is compelled to speak or where such silence amounts to speech. The main difference between fraud and misrepresentation is that in one case, the person providing the facts believes it is true, and in the other case, they believe it is true. Deception is essential in case of fraud. In both cases, the contract can be avoided, but in fraudulent silence or misrepresentation, the contract cannot be avoided if the other party has had the opportunity to discover the truth with the help of ordinary care. The presentation should be a fact and not an opinion, although in some cases the opinion may be treated as a fact, it should be such that it would have prevented a reasonable man from entering into a contract. .