Principle Mere silence as to facts likely to affect the decision of a person to enter into a contrac...........

Indian Contract Act (ICA)1872 Others

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 horse, then B shall presume that the horse is of sound mind. A says nothing to B about the mental condition of horse.

A has committed fraud

A has committed misrepresentation

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

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

Explanation:

B specifically asked A to state the mental condition of the horse.
A stayed silent but his silence amounted to speech indicating that the mental state of the horse is sound.
Thus, it would amount to fraud.
Hence, option 1 is the correct answer.