The document discusses fraud in business law and contracts. It defines fraud as a willful misrepresentation made with the intent to deceive or induce another party to enter a contract. Specifically, fraud involves a false statement, concealment of facts, a promise made without intent to perform, or other deceitful acts according to Section 17 of the Indian Contract Act of 1872. The elements of fraud are that it must be committed by a party to the contract with the intent to deceive and actually deceive the other party. If fraud occurs, the aggrieved party has remedies like rescinding the contract, demanding performance, suing for damages or restitution.

1. FRAUD
BUSINESS LAW
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

2. FREE CONSENT
 According to Sec.14 of the Indian Contract Act, 1872,
consent is said to be free when it is not caused by :
1. Coercion (Sec.15)
2. Undue influence (Sec.16)
3. Fraud (Sec.17)
4. Misrespresentation (Sec. 18)
5. Mistake (Secs.20,21&22)
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES,
NMCC, MARTHANDAM

3. FRAUD
• Willful representation made by a party to contract with the intention to deceive
the other party, or induce such a party to enter into a contract.
• It means a false statement made knowingly, without belief in its truth, or
recklessly without caring whether it is true or false.
• Fraud denotes an absence of honest belief and presence of a wicked mind.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES,
NMCC, MARTHANDAM

4. FRAUD - DEFINITION
• According to sec.17, Fraud means and includes any of the following acts done
with the intention to deceive or to induce a person to enter into a contract.
• A false suggestion known to be false OR not believed to be true.
• The active concealment of a fact with the knowledge or belief of the fact.
• A promise made without any intention of performing it.
• Doing any other act fitted to deceive.
• Doing any such act or making any such omission which the law specially
declares to be fraudulent.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES,
NMCC, MARTHANDAM

5. Elements of Fraud
1. Fraud must have been committed by a party to the contract or by his agent.
Fraud by a stranger does not affect the validity of the contract.
2. Must be one of the following:
a) False statement
b) Concealment
c) Only promise and no execution
d) Other act if any.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES,
NMCC, MARTHANDAM

6. Elements of Fraud
3. Any such act or omission which the law specially declares to be fraudulent.
4. Must have been committed with the intention to deceive and must have actually
deceived.
5. The deceit must have been aimed at the other party to the contract or his agent.
6. The other party must have relied upon the statement and must have been deceived.
7. The other party must have suffered some loss subsequently.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES,
NMCC, MARTHANDAM

7. CONSEQUENCES OF FRAUD
• The aggrieved party/victim have the following remedies.
• Right to rescind the contract
• Insist on performance
• Sue for damages
• Restitution
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES,
NMCC, MARTHANDAM

8. S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES,
NMCC, MARTHANDAM