This document discusses fraud and misrepresentation under Indian contract law. It defines fraud as intentionally deceiving another party through false suggestions, concealment of facts, promises without intent to perform, or other deceitful acts. Misrepresentation involves making an innocent but incorrect statement of fact. The key differences are that fraud requires intent and can result in damages, while misrepresentation is unintentional and usually does not lead to damages claims. Both can allow the deceived party to avoid the contract or demand its proper performance. The document outlines the elements of fraud and misrepresentation, available remedies, and exceptions regarding negligence or failure to discover the truth.

1. Welcome…

2. Misrepresentation and fraud
Presented by :Nishna Sathyan,K.M

3. Fraud…
• Comes under section 17 and 18 of Indian Contract Act

4. Defining fraud…
• 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 agent, with intend to deceive another party
thereto of his agent, or to induce him to enter into the
contract:-

5. The acts…
• Sub Section (1) the suggestion, as a fact, of that which is
not true, by one who does not believe it to be true
• Sub Section (2) the active concealment of a fact by one
having knowledge or belief of the fact
• Sub Section (3) a promise made without any intention of
performing it
• Sub Section (4) any other act fitted to deceive
• Sub Section (5) any such act or omission as the law
specially declares to be fraudulent

6. Requisites of fraud…
• A representation or assertion, and it must be false
• The representation must be of fact
• The representation made with the knowledge of falsity or recklessly
• The representation made with the intension of inducing party
deceived to act upon it
• The representation must be in fact deceive
• The party subjected to fraud must have suffered some losses

7. Sometimes silence is also fraud…

8. “ It was like riding a tiger, not knowing how
to get off without being eaten”

9. Remedies…
• Can avoid performance of contract
• He can insist contract shall be performed and that shall
put in position in which he would have been if the
representation made been true

10. • Normally claim given for damages
Exceptional cases
• When party have means to discover the truth
with ordinary diligence
• After becoming aware of fraud still takes benefit
under the contract
Restitution for fraud…

11. Misrepresentation
• Comes under Section 18 and 19 of Contract Act

12. Representation…
• A statement of fact made by one party to the
contract to the other which induces the other to
enter into the contract

13. Misrepresentation
• Incorrect or false statement
• Made not to deceive or defraud
• It is innocent
• Party making it believes it to be true

14. Consequences of misrepresentation
• Avoid performance of contract
• He can insist contract shall be performed and that
shall put in position in which he would have been
if the representation made been true

15. Restitution for misrepresentation...
• Normally no claim given for damages
Exceptional cases
Misrepresentation made on prospectus of company
Agent who commit breach of warranty of authority
Negligent representation

16. Distinguishing Fraud & misrepresentation
Fraud
• Intentional
• Can claim for damage
• Contract can be avoided
Misrepresentation
• Innocent
• No claim for damages
• Contract can not be
avoided in all cases

17. Conclusion…
• Fraud is an intentional act & misrepresentation is an
innocent act…anyway always try to keep your contract
away from both…

18. References…
• Gulshan, S.P (2000) “Business law". New age international
Ltd, New Delhi.
• Shukla, M.C(1999) “A Manual Of Mercantile Law”. S.Chand
& company Ltd, New Delhi.

19. One last thing…