Difference Between ‘Fraud and Misrepresentation

The following are the points of distinction between the two:

1. Fraud implies an intention to deceive, it is deliberate or wilful; whereas misrepresentation is innocent, without any intention to deceive.

2. Fraud is a civil wrong which entitles a party to. claim damages in addition to the right of rescinding the contract. Misrepresentation, gives only the right to avoid the contract and there can be no suit for damages

3. In case of misrepresentation, the fact that the aggrieved party had the means to discover the, truth with ordinary diligence will prevent the party from avoiding the contract. But In case of fraud: excepting fraud by silence, the contract is voidable even though the party defrauded had the means of discovering the truth with ordinary diligence,


Few points regarding fraud:


(i) Fraud by a stranger to the contract does not affect contract. It may, be recalled that ‘coercion’ as ‘undue influence’ by a stranger to a contract affect the contract.

(ii) Fraudulent representation must have been instrumental in inducing the other party to enter into the contract i.e., but for this, the aggrieved party would not have entered into the contract.

(iii) The plaintiff must have been actually deceived by fraudulent state-ment. A deceit which does not deceive gives no ground for action.

(iv) The plaintiff must be thereby idemnified. Unless the plaintiff has sustained a damage or injury, no action will lie. It is a common saying that “there is no fraud without damages.”

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