Q no 1 In the light of contract Act 1872, explain the difference between coercion and undue influence.
Ans. As per the Contract Act, 1872, following are the difference between coercion and undue influence.
Q No 2 Distinguish Between Fraud and Misrepresentation.
Ans. Fraud Misrepresentation
Intention
Implies and intention to deceive. Representation is innocent without intent to deceive.
Remedies
It is civil wrong and aggrieved party can claim Aggrieved party can only avoid the contract but damages are only
damages in addition to cancellation of payable at discretion of court
contract.
Definition
Includes false statement or misleading conduct
Intentional deception or misleading conduct
Effect on Consent
Consent caused by fraud is voidable Consent caused by misrepresentation is voidable
Legal Consequences
Potentially leads to criminal Typically does not involve criminal liability.
liability.
Q no 3. What would be the effect on an agreement, if there is no "Consensus ad idem" between the parties?
Ans. If there is no "Consensus ad Idem" between the parties in an agreement, the agreement would lack the mutual consent necessary to form a valid contract.
Therefore, the contract would become voidable at the option of the aggreived party and the party whose consent was so caused may rescind or continue the contract.
Furthermore, the aggreived party may , if he thinks fit, insist that the contract shall be performed.
Moreover, the party who has rescind the contract shall be liable to return or repay the benefit availed by him, and the party to whom the money has been paid,
shall be liable to repay or return it.
Q no 4.
Ans. As per the provision of the contract act, 1872, Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless:
a) the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak (e.g. parties stand in fiduciary relationship), or
b) his silence is, in itself, equivalent to speech.
(a) In this case, neither there are such circumstances which creates the duty of Mr X keeping silence to speak, nor Mr. X silence is , in itself , equivalent to speech, therefore the silence of Mr. X
about the unsoundness of the horse, would not be treated as fraud, and the contract would be treated as Valid.
(b) In this case, it seems that Y is the daughter of M. X who has just come of age, Here the relation between the parties i.e Mr. X and Y, would make it Mr. X's duty to tell Y if the horse is unsound.
Therefore such act by Mr X would be treated as fraud and the contract would become voidable at the option of Y.
(c) In this case, that Mr. X silence is equivalent to speech. As Mr X says nothing to Y, therefoer, if the horse turns out to be vicious, then Mr. X can be held liable for fraud, and the contract would
become voidbale at the option of Y.
