Section 17 - Fraud defined : Indian Contract Act
What is Fraud? Section 17 of Indian Contract Act
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
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
(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