Page 19 - 01. Indian Contract Act, 1872

against the promisor

5. If the contract is avoided any If the contract is avoided it is at the
benefit received has to be discretion of the court to direct the

restored or refunded aggrieved party to restore or
refund the benefit received

(iii)

Fraud -Also known as willful misrepresentation
 Fraud means and includes any of the following acts committed by a party to a

contract, or with his connivance or by his agent with intent to deceive another
party thereto or his party or to induce him to enter into the contract:

1. The suggestion, as to fact, of that which is not true by one who does not
believe it be true

2. The active concealment of a fact by one having knowledge or belief of
the fact

3. A promise made without any intention of performing it
4. Any other act fitted to deceive

5. Any such act or omission as to law specially declared to be fraudulent

 Mere silence as to facts likely to affect the willingness of a person to enter
into a contract is no fraud.

 But silence amounts to fraud in following cases:
(i) Where it is the duty of a person to speak

(ii) Where his silence is equivalent to speech

(iii) When a person discloses only the half truth.
 Following are certain contracts upon which law imposes a special duty to

act with the utmost good faith (Contracts of Uberrimae fidei ):
(i) insurance contracts

(ii) prospectus of a company
(iii) Contract for sale of land

(iv) Contracts of family arrangements

19