Principle It is a case of fraud where a party to a contract knows or believes a fact to be true but ...........

Indian Contract Act (ICA)1872 Others

Principle: It is a case of fraud where a party to a contract knows or believes a fact to be true, but conceals it actively from the other party with a view to induce that person to enter into the contract.

Facts: While taking a life insurance policy, in reply to questions by the insurance company during the inquiry into his proposal, Zameer deliberately concealed the fact of his medical treatment for a serious ailment, which he had undergone only a few weeks ago.

The act of Zameer did not amount to fraud, as disclosing the fact would have resulted in exposure of his privacy.

The act of Zameer amounted to innocent misrepresentation

The act of Zameer did not amount to any misrepresentation.

The concealment of fact by Zameer amounted to fraud.

Explanation:

Zameer actively conceals his serious ailment in order to conclude the contract of buying the life insurance policy.
Such an active concealment amounts to fraud as per the given principle.
The concealment of fact by Zameer amounted to fraud.