Question

Legal Principle: Mere silence as to the facts likely to affect the willingness of a person to enter into a contract is not a fraud, unless the circumstances of the case are such that, on close examination it is found to be the duty of the person keeping silent to speak, or unless his silence is, in itself, equivalent to speech.
Facts : X sells by auction to Y, a horse which X knows to be of unsound state of mind. X says nothing to Y about the horse's unsound state of mind. Give the correct answer.

• A. X can be held liable for fraud.
• B. X can be held liable for misrepresentation.
• C. X cannot be held liable,because he did not say anything positive about the mental state of the horse.
• D. X cannot be held liable because it is the buyer who must be aware of the things.

Answer 1

The correct option is D X cannot be held liable because it is the buyer who must be aware of the things.

Illustration 'a' of Section 17 of the Indian Contract Act, 1872, states: A sells, by auction, to B, a horse which A knows to be unsound. A says nothing to B about the horse’s unsoundness. This is not fraud in A. (a) A sells, by auction, to B, a horse which A knows to be unsound. A says nothing to B about the horse’s unsoundness. This is not fraud in A.

The fact that X did not speak anything positive about the mental state of horse, wouldn't make any X liable.