CHANAKYA NATIONAL LAW UNIVERSITY

NYAYA NAGAR, MITHAPUR, PATNA - 800001

ROUGH DRAFT SUBMITTED IN THE PARTIAL FULFILMENT OF THE COURSE

TITLED –

LAW OF CONTRACTS - 1

CONSENT OBTAINED BY FRAUD

SUBMITED TO: -

MRS. SUSHMITA SINGH

FACULTY OF LAW OF CONTRACTS

SUBMITTED BY: -

AMOL VERMA

SECOND SEMESTER

ROLL NO.: 1813

B.B.A., L.L.B (HONS)

(2017-2022)
INTRODUCTION

The Indian Contract Act, 1872 prescribes the law relating to contracts in India. The Act was
passed by British India and is based on the principles of English Common Law. It is
applicable to all the states of India except the state of Jammu and Kashmir. It determines the
circumstances in which promises made by the parties to a contract shall be legally binding
and the enforcement of these rights and duties. As per section 2(h) of the Indian contract act
of 1872 a contract is an agreement enforceable by law. Conditions of enforceability are
mentioned under section 10 according to which—All agreements are contracts if they are
made by the free consent of parties competent to contract, for a lawful consideration and with
a lawful object, and are not hereby expressly declared to be void. The genuineness of the
consent implies that the parties to the contract must mean the same thing in the same sense
and not only that but they should mutually agree voluntarily. If their minds do not meet at the
same thing in the same sense voluntarily, then their consent shall not be called free or
voluntary. The consent in such case might have been obtained under Fraud or
Misrepresentation or Coercion or undue influence. In such a case the party giving his consent
under any of these four elements shall have a right to withdraw his consent. Very often facts
are misrepresented, that is, they are displayed in a distorted manner. When facts are
intentionally misrepresented, it is known as fraud, which is dealt with in section 17 of the
Indian contract act. Section 17 defines fraud as- “Fraud” means and includes any of the
following acts committed by a party to a contract, or with his connivance, or by his agents,
with intent to deceive another party thereto his agent, or to induce him to enter into the
contract. This Explanation states a very important proposition of law. According to
Explanation to Section 17 – the mere silence as to a fact likely to affect the willingness of a
person to enter into a contract is not fraud. However, such silence is to be held as fraud, if the
circumstances of the case that –

 It is the duty of the person keeping silence – to speak

 That his silence in itself is equivalent to speech.
AIMS AND OBJECTIVES:
 The researcher’s prime aim is to present a detailed study of "consent obtained by
fraud" through articles, affirmations, decisions and sections of the Indian contract act
of 1872.
 The researcher aims to descriptively provide a critical overview of the topics arising.
 The researcher aims to study how contract by fraud is voidable at the option of the
aggrieved party.
 And also to know about evolution of related laws with changing spectra of society.

HYPOTHESIS:

 The researcher presumes that the element of fraud in a contract vitiates the contract.
 The researcher also presumes that Fraud is a willful misrepresentation or a fraudulent
misrepresentation as the statement is made with a wrongful intention of deceiving
other party and inducing them to enter into a contract.

RESEARCH QUESTIONS:

1. What is consent as per the Indian contract act 1872?

2. When is consent said to be obtained freely?
3. What is fraud as per the Indian contract act 1872? What are the characteristics of
fraud?
4. Does silence amounts to fraud?
5. What are the effects of fraud? What rights does fraud gives to the aggrieved party?
6. What are the essential elements required to constitute consent obtained by fraud?

RESEARCH METHODOLOGY:

The researcher will be relying on Doctrinal method of research to complete the project. These
involve various primary and secondary sources of literature and insights.
SOURCES OF DATA:

The researcher will be relying on both primary and secondary sources to complete the
project.

PRIMARY SOURCES:

1. Indian contract act of 1872.

2. Case laws related to the subject at hand.

SECONDARY SOURCES:

1. Websites and Blogs.

2. Newspapers.
3. Magazines.

LIMITATIONS OF THE STUDY:

The researcher has territorial, monetary and time limitations in completing the project.

The researcher is going to limit the project’s scope to the events and status quo of the time in
which the said events unfolded, which paved the way for the development of the topic
discussed.

TENTATIVE CHAPTERIZATION:

1. Introduction
2. Meaning of free consent.
3. Components of consent in voidable contract.
4. Effects of absence of free consent.
5. Meaning and essential elements of fraud.
6. Effects of fraud.
7. Situations where silence amounts to fraud.
8. Conclusion and Suggestions.
9. Bibliography.
BIBLIOGRAPHY:

The researcher has consulted following sources to complete the rough proposal:

PRIMARY SOURCES:

1. Case laws related to the subject at hand.

SECONDARY SOURCES:

1. BOOKS:
a. Author: R.K. Bangia, Contract - I, Published by Allahabad law agency,
Edition 21st (2016).
b. Author: Avatar Singh, Contract and specific relief, Published by Eastern book
company(2006)
2. WEBSITES:
a. https://academia.edu
b. https://enotes.com
c. https://blog.ipleaders.in
d. https://legalservicesindia.com