Question Scenario
Define Misrepresentation and Fraud. Explain the difference between Fraud and Misrepresentation as per the Indian Contract Act, 1872.
Estimated Writing Time: 10 mins Try in Practice Mode
Source: 3)c)6m,MDTP3, 3)c)6m,MTP2,June2024, 2)a)7m,Dec20206 Marks
Back to Law List Suggested Answer
1. Provisions of the Act / Applicable Law
Rescission of the contract and claim for damages The injured party can repudiate the contract and claim damages. The injured party is entitled to repudiate the contract or sue for restitution but cannot claim the damages.
Means to discover the truth The party using the fraudulent act cannot secure or protect himself by saying that the injured party had means to discover the truth. Party can always plead that the injured party had the means to discover the truth.
2. Analysis & Application of Facts
Definition of Fraud : Refer Ans 8
Definition of misrepresentation: Refer Ans 11
Distinction between fraud and misrepresentation:
Basis Fraud Misrepresentation
Intention To deceive the other party by hiding the truth. There is no such intention to deceive the other party.
Knowledge of Truth The person making the suggestion believes that the statement as untrue. The person making the statement believes it to be true, although it is not true.
Exam Strategy Tip
When answering law questions in the CA Foundation exam, follow the "Provision -> Facts -> Conclusion" structure for maximum marks. Ensure to state the relevant sections where applicable to earn bonus marks from the evaluator.
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