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Section 17 - Fraud defined : Indian Contract Act 1872

 

What is Fraud? Section 17 of Indian Contract Act 1872

Section 17 of Indian Contract Act 1872 : "Fraud defined"

17. "Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent1, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:-

(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;

(2) the active concealment of a fact by one having knowledge or belief of the fact;

(3) a promise made without any intention of performing it;

(4) any other act fitted to deceive;

(5) any such act or omission as the law specially declares to be fraudulent.

Explanation.-Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak1, or unless his silence is, in itself, equivalent to speech.

Illustrations
(a) A sells, by auction, to B, a horse which A knows to be unsound. A says nothing to B about the horse's unsoundness. This is not fraud in A.
(b) B is A's daughter and has just come of age. Here, the relation between the parties would make it A's duty to tell B if the horse is unsound.

(c) B says to A - "If you do not deny it, I shall assume that the horse is sound". A says nothing. Here, A's silence is equivalent to speech.

(d) A and B, being traders, enter upon a contract. A has private information of a change in prices which would affect B's willingness to proceed with the contract. A is not bound to inform B.

 

INDIAN CONTRACT ACT 1872

Section 2 - Interpretation clause

CHAPTER I THE COMMUNICATION, ACCEPTANCE AND REVOCATION OF PROPOSALS

Section 3 - Communication, acceptance and revocation of proposals

Section 4 - Communication when complete

Section 5 - Revocation of proposals and acceptances

 

 

Section 6 - Revocation how made

Section 7 - Acceptance must be absolute

Section 8 - Acceptance by performing conditions, or receiving consideration

Section 9 - Promises, express and implied

CHAPTER II CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS

Section 10 - What agreements are contracts

 

 

Section 11 - Who are competent to contract

Section 12 - What is a sound mind for the purposes of contracting

Section 13 - Consent defined

Section 14 - Free consent defined

Section 15 - Coercion defined

 

 

Section 16 - Undue influence defined

Section 17 - Fraud defined

Section 18 - Misrepresentation defined

Section 19 - Voidability of agreements without free consent

Section 19A - Power to set aside contract induced by undue influence

Section 20 - Agreement void where both parties are under mistake as to matter of fact

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