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Section 17 of Indian Contract Act, 1872

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Section 17 of Indian Contract Act, 1872 defines Fraud.

From the Act

"Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto of 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 speak,1* 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.

Related Topics

Related Sections from the Act

  • Section 14 - Says a Contract is voidable if one of the parties in the contract is induced by coercion, fraud misinterpretation, or a mistake.
  • Section 238 - Effect, on agreement, of misrepresentation or fraud by agent

Related Acts

Related Topics