Indian Contract Act,1872
Act No : 9
Section : "Fraud" defined
17."Fraud" defined.-"Fraud" means and includes any of thefollowing acts committed by a party to a contract, or with hisconnivance, or by his agent,2*--------------------------------------------------------------------- 1 Subs. by Act 6 of 1899, s. 2, for the original s. 16. 2 Cf. s. 238, infra;---------------------------------------------------------------------25with intent to deceive another party thereto of his agent, or toinduce 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 thewillingness of a person to enter into a contract is not fraud, unlessthe 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 hissilence is, in itself, equivalent to speech. Illustrations (a) A sells, by auction, to B, a horse which A knows to beunsound. A says nothing to B about the horse's unsoundness. This isnot fraud in A. (b) B is A's daughter and has just come of age. Here, therelation between the parties would make it A's duty to tell B if thehorse,is unsound. (c) B says to A--"If you do not deny it, I shall assume that thehorse is sound." A says nothing. Here, A's silence is equivalent tospeech. (d) A and B, being traders, enter upon a contract. A hasprivate information of a change in prices which would affect B'swillingness to proceed with the contract. A is not bound to inform B.
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