A party who has been induced to enter into a contract by fraud, has the following remedies open to him:
1. He can rescind the contract i.e he can avoid the performance of the contract; contract ‘being voidable at his option (Sec. 19); ,or
2. He can ask for restitution and insist that the contract shall be per-formed, and that he shall be put in the position in which he would have been, if the representation made had been true (Sec. 19).
Illustration A, fraudulently informs B that A’s estate is free from en-cumbrance. B thereupon buys the estate. The estate is subject to a mortgage. B may either avoid the contract, or’ may insist on its being carried out and the, mortgage debt of deemed. [Illustration (c)to Section 19].
The aggrieved party can also sue for demand if any. Fraud is a ‘civil wrong’ hence compensation is payable. For instance, if the party suffers injury because of unsound horse, which was not disclosed despite enquiry, compensation can be demanded. Similarly, where a man was fraudulently induced to buy a house, he was allowed to recover the expense involved in moving into the house as damages (in addition to rescission. of the contract) [Doyle vs Olby (Ironmongers) Ltd ].
Special points- For giving rise to an action for deceit, the following points deserve special attention:
(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.”
In cases. of fraudulent silence, the contract is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence ( Exception to Sec. 19 given in the Act). Note that in other cases of fraud, this is no defence i.e., the contract is voidable even if the fraud could be discovered with ordinary diligence.
1. He can rescind the contract i.e he can avoid the performance of the contract; contract ‘being voidable at his option (Sec. 19); ,or
2. He can ask for restitution and insist that the contract shall be per-formed, and that he shall be put in the position in which he would have been, if the representation made had been true (Sec. 19).
Illustration A, fraudulently informs B that A’s estate is free from en-cumbrance. B thereupon buys the estate. The estate is subject to a mortgage. B may either avoid the contract, or’ may insist on its being carried out and the, mortgage debt of deemed. [Illustration (c)to Section 19].
The aggrieved party can also sue for demand if any. Fraud is a ‘civil wrong’ hence compensation is payable. For instance, if the party suffers injury because of unsound horse, which was not disclosed despite enquiry, compensation can be demanded. Similarly, where a man was fraudulently induced to buy a house, he was allowed to recover the expense involved in moving into the house as damages (in addition to rescission. of the contract) [Doyle vs Olby (Ironmongers) Ltd ].
Special points- For giving rise to an action for deceit, the following points deserve special attention:
(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.”
In cases. of fraudulent silence, the contract is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence ( Exception to Sec. 19 given in the Act). Note that in other cases of fraud, this is no defence i.e., the contract is voidable even if the fraud could be discovered with ordinary diligence.
What are the Effects of Fraud?
![What are the Effects of Fraud?]()
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