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Vibhav   21 August 2024

Fraud under indian contract act

If an agreement says that "...this is the entire agreement and there are no other written or verbal agreements or representations" and yet later one party finds that the intent of the other party was not as represented in the agreement, can the victim claim fraud? For example, the agreement was to open a business to offer consulting services, where party A would fund the business because party B had the expertise in the business. Later it is found that party A entered in the business with party B, because he wanted to be part of another business that Party B had, and was holding the funding of the agreed upon business unless party A was also made a part of the other business of party B. 

If party B does have a cause of action, What are the various laws under which party B can sue party A? One would be Section 17 of the Indian contract act. Any other?

 



Learning

 4 Replies

Dr. J C Vashista (Advocate )     21 August 2024

The terms and conditions of the contract has to be explicit and clear. Once A & B agreed and executed an agreement it is binding.

By the way what is your problem / dispute / concern / locus standi to this hypothetical academic exercise, be specific, precise and clear instead of posting moot court topic ?

Vibhav   21 August 2024

I like to post short queries so that they are easy to answer rather than describing all facts in detail. Take a cue from Advocate Kalaiselvan. See how he answers with precision.

Real Soul.... (LEGAL)     21 August 2024

This is a standard Agreement term which reads as This is the entire agreement and there are no other written or verbal agreements or representations"

 and there is another part included in this standrad clasue that , This contract supersedes all prior agreement and understandings, whether oral or written, in connection therewith etc,.

You need to understand the purpose of this clasue which is intended to limit the Agreement as final document for future references.  Now if the Party in the agreement has enterd in an agreement with anyother party that won't effect or casue this clasue to be implemented,

If there is clear bar for either of Parties  to contract further with  any other Party then only the Agreement will be deemed voilated. Just Entire Agreement clasue does not amounts to breach for the reason you stated.

You can read below article for full undertsanding

https://www.reedsmith.com/en/perspectives/2015/12/entire-agreement-clauses--do-they-work-or-not

 

T. Kalaiselvan, Advocate (Advocate)     21 August 2024

If the conditions of the contract or agreement are intended to be executed with fraudulent notion behind the contract and if either of the party commits breach or violates the contract condition then the contract itself will be void, the aggrieved party can sue the other party for the losses or damages suffered based on the documentary evidences to support the claim.


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