Choose the best option for the following statement:
The distinction between fraud and misrepresentation:
1. Fraud is more less intentional wrong, whereas misrepresentation may be quite innocent.
2. In addition to rendering the contract voidable, is a cause of action in tort for damages. Simple misrepresentation is not a tort but a person who rightfully rescinds a contract is entitles to compensation for any damages which he has sustained through the non-fulfilment of the contract.
3 . A person complaining of misrepresentation can be met with the defence that he had "the means of discovering the truth with ordinary diligence". But excepting fraud by silence in other cases of fraud it is no defence that "the plaintiff had the means of discovering the truth by ordinary diligence".
4. None of the above.
Choose the best option for the following statement:
The distinction between fraud and misrepresentation:
1. Fraud is more less intentional wrong, whereas misrepresentation may be quite innocent.
2. In addition to rendering the contract voidable, is a cause of action in tort for damages. Simple misrepresentation is not a tort but a person who rightfully rescinds a contract is entitles to compensation for any damages which he has sustained through the non-fulfilment of the contract.
3 . A person complaining of misrepresentation can be met with the defence that he had "the means of discovering the truth with ordinary diligence". But excepting fraud by silence in other cases of fraud it is no defence that "the plaintiff had the means of discovering the truth by ordinary diligence".
4. None of the above.
The correct option is C 1, 2 and 3 are correct
BASIS FOR COMPARISON FRAUD MISREPRESENTATION Meaning A deceptive act done intentionally by one party in order to influence the other party to enter into the contract is known as Fraud. The representation of a misstatement, made innocently, which persuades other party to enter into the contract, is known as misrepresentation. Defined in Section 2 (17) of the Indian Contract Act, 1872 Section 2 (18) of the Indian Contract Act, 1872 Purpose to deceive the other party Yes No Variation in extent of truth In a fraud, the party making the representation knows that the statement is not true. In misrepresentation, the party making the representation believes the statement made by him is true, which subsequently turned out as false. Claim The aggrieved party, has the right to claim for damages. The aggrieved party has no right to sue the other party for damages. Voidable The contract is voidable even if the truth can be discovered in normal diligence. The contract is not voidable if the truth can be discovered in normal diligence.
| BASIS FOR COMPARISON | FRAUD | MISREPRESENTATION |
|---|---|---|
| Meaning | A deceptive act done intentionally by one party in order to influence the other party to enter into the contract is known as Fraud. | The representation of a misstatement, made innocently, which persuades other party to enter into the contract, is known as misrepresentation. |
| Defined in | Section 2 (17) of the Indian Contract Act, 1872 | Section 2 (18) of the Indian Contract Act, 1872 |
| Purpose to deceive the other party | Yes | No |
| Variation in extent of truth | In a fraud, the party making the representation knows that the statement is not true. | In misrepresentation, the party making the representation believes the statement made by him is true, which subsequently turned out as false. |
| Claim | The aggrieved party, has the right to claim for damages. | The aggrieved party has no right to sue the other party for damages. |
| Voidable | The contract is voidable even if the truth can be discovered in normal diligence. | The contract is not voidable if the truth can be discovered in normal diligence. |
