Question

The question consists of legal propositions/principles (hereinafter referred to as 'principle') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true. In other words, in answering the following question, you must not rely on any principles except the principle that is given hereinbelow for the question. Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in the study of law, research aptitude, and problem-solving ability.

Principle: Mere silence as to facts likely to affect the decision of a person to enter into a contract does not amount to fraud unless his silence is in itself equivalent to speech.
Facts: A sells to B a horse which A knows to be of unsound mind. B says to A that if A does not say anything about the state of mind of the horse, then B shall presume that the horse is of sound mind. A says nothing to B about the mental condition of the horse.

Options

• A has committed fraud 

• A has committed misrepresentation 

• There cannot be fraud because A says nothing about  the mental condition of the horse

• There cannot be fraud because B did not ask A  whether the horse is of sound mind

Answer 1

A has committed fraud 

Explanation:

According to the facts provided, we know that B specifically says to A that if he does not say anything about the state of mind of the horse, the B shall presume that horse is of sound mind. Thus 'A''s silence is equivalent to speech and will amount to fraud under section 17 of the Indian Contract Act, 1872 as is also enumerated by the above principle.