In most cases, the only tool for dealing with fraud issues is circumstantial evidence. If this were not allowed, the ends of justice would be constantly, if not invariably, defeated. Simultaneously, fraud involvement is only to be blamed on a deliberate wrongdoer. Due to contributory negligence, the penalties would not be diminished.
As per Section 18 of the Indian Contract:. Firstly, when the deceiving person declares that no justified data is misleading a person is some way. Secondly, there is a breach of an obligation that has caused the bias of one or the other.
Lastly, a mistake was committed by a person because of the misrepresentation of the act or information. If the party that has suffered as a result of the misrepresentation when entering into a contract may choose to terminate the contract, rescind the contract within a reasonable time under the Specific Relief Act There are two types of misrepresentation:.
A fraudulent act intentionally committed by one party to induce the other party to enter into the contract is referred to as fraud. Misrepresentation is known as the representation of an innocent mistake, which persuades other parties to enter into the contract. In fraud, the party making the representation knows that the declaration is not true. In misrepresentation, the party making the representation considers the statement made by him to be valid, which later turned out to be false.
The aggrieved party has no right to sue for damages to the other party. The contract is voidable even if in usual diligence the truth can be found.
If the truth can be found with reasonable diligence, then the contract is not voidable. There are two forms of mistake under Indian Contract Law:. When both the parties to a contract are under a mistake of fact, essential to the agreement, such a mistake is known as a bilateral mistake. Bilateral mistakes are also sometimes referred to as mutual or common mistakes. All the parties do not agree to the same thing and in the same way, which is the concept of consent.
Since there is no consent, the contract is null and void. The arrangement is considered invalid. A unilateral mistake occurs when only one party to the contract makes a mistake.
The contract will not be void in such a case. It is specified in Section 22 of the Act that the contract will not be void just because one party made the mistake. So if only one party has made a mistake the contract remains a valid contract. In actual a horse is not a racing horse. SlideShare uses cookies to improve functionality and performance, and to provide you with relevant advertising.
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Free consent. Upcoming SlideShare. Like this presentation? Why not share! Embed Size px. Start on. Show related SlideShares at end. WordPress Shortcode. Next SlideShares. Download Now Download to read offline and view in fullscreen. Download Now Download Download to read offline. Free consent Download Now Download Download to read offline. Gurjit Follow. Legal Issues, Contracts and Liability. Capacity To Contract. Chapter 14 — Capacity to Contract. Capacity to contract. Capacity to Contract.
Trustee and beneficiary. Husband and wife. Landlord and tenant. A person whose mental capacity is low. Old age. Doctor and patient. Tender age. Creditor and debtor. Real and apparent authority. Fiduciary relationship. Parent and child. Adult child and parent. Lawyer and client. Some relationships, such as one between a patient and a doctor or a parent and a child, are considered to run the risk of undue influence and are legally outlined.
The onus in this type of relationship is on the person with influence to prove that he was not using his position to take advantage of the other party. In other situations, one party, based on previous interactions, can be accused of using the trust of the other party to his advantage. For example, Bert is Ernie's therapist. Bert is also involved in a couple of real estate development deals around town. Ernie starts talking to Bert about how he has heard about units for sale in the complex that Bert is invested in developing.
Ernie isn't interested and doesn't feel it's appropriate for him to purchase a home at that time, but feels left behind by his friends who are all purchasing units or making other investments in the project. Bert uses his place of power over Ernie to convince him that it's a good step forward in his life also to make an investment in the project.
This is to Ernie's financial detriment, but it increases the value of Bert's investment. Bert has used undue influence. There is a pandemic of undue influence in the financial markets of the world. It can be as simple as leveraging information someone has on someone else in order to induce a sale or purchase, or it can be as complicated as forcing board members to vote a certain way.
Having third-party counsel, or a mediator, present when deals or large trades are occurring can help to mitigate instances of undue influence. Business Leaders. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.
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