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What Is Meant by "Silence Is Not Fraud"?

Mere silence about a fact that could affect a person's willingness to enter a contract is generally not considered fraud under Indian law. However, silence can be considered fraudulent if the circumstances require the silent party to speak, such as if they have a close relationship with the other party. Silence can also be equivalent to speech if the other party directly asks a question that is not denied. The document provides examples of cases where silence would and would not constitute fraud based on the specific circumstances and relationships between the parties.

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Lydia Jong
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201 views

What Is Meant by "Silence Is Not Fraud"?

Mere silence about a fact that could affect a person's willingness to enter a contract is generally not considered fraud under Indian law. However, silence can be considered fraudulent if the circumstances require the silent party to speak, such as if they have a close relationship with the other party. Silence can also be equivalent to speech if the other party directly asks a question that is not denied. The document provides examples of cases where silence would and would not constitute fraud based on the specific circumstances and relationships between the parties.

Uploaded by

Lydia Jong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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What is meant by “silence is not fraud”?

Mere silence act as to fact likely to affect he willingness of a person to enter into a contract is
not fraud, unless the circumstances of the case are such that, regard being had to them, it is the
duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to
speech.

Illustrations under section 17

(a) A sells, by auction, to B, a horse which A know to be unsound. A say nothing to B about
the horse’s unsoundness. This in not fraud in A.

(b) B is A’s daughter and has just come of age. Here, the relation between the parties would
make it A’s duty to tell B if the horse is unsound.

(c) B says to A. “If you do not deny it, is hall assume that the horse is sound.” A says nothing.
Here, A’s silence is equivalent to speech.

(d) A and B, being traders, enter upon a contract. A has private information of the change in
prices which would affect B’s willingness to proceed with the contract. A is not bound to
inform B.

The general rule is that mere silence or non-disclosure would not constitute fraud. However,
they may be certain circumstance under which silence or non-disclosure may constitute fraud.
The explanation of section 17 provides that the circumstances may be such that ‘it is the duty
of the person keeping silence to speak’ (example Illustration (b) to section 17) or, in certain
circumstances, silence may be ‘equivalent to speech’ (example, Illustration (c) to section 17)

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