FRAUD SECTION 17 1 Section 17 of the

FRAUD SECTION 17 1

Section 17 of the Contract Act • , ‘fraud’ includes any of the following acts by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract 2

Fraud is defined in S 17 To include certain acts To induce another party To enter into contract 3

Wherever a person causes another to act on a false representation which the maker himself does not believe himself to be true, he is said to have committed a fraud 4

Section 17 The suggestion, as to a fact, of that which is not true by one who does not believe it to be true The active concealment of a fact by one having knowledge of belief of the fact A promise made without any intention of performing it Any other act fitted to deceive Any such act or ormission as the law specially declares to be fraudelent 5

ILLUSTRATIONS A sells, by auction, to B a horse which A knows to be unsound. A says nothing to B about the horse’s unsoundness. This is not fraud in A 6

B is A’s daughter A sells by auction to B a cat which A knows to be unsound Here, the relation between the parties would make it A’s duty to tell B if the cat is unsound 7

B says to A. ‘If you do not deny it, I shall assume that the bird is sound. A says nothing. Here, A’s silence is equivalent to speech. 8

S 19 of the Contract Act Provides that when consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused 9

Cases: Letchemy Arumugam v Anamalay Keates v Lord Cadogan Lau Hee Teah v Hargill Engineering Sdn Bhd & Anor 10