What is Fraud
When a Party to an Agreement or any of his representative/s commit an act with the intention of deceiving the other party to enter into an Agreement, it is considered as Fraud.
The following acts are considered to be fraudulent:
- Suggestion of an untrue fact
- Active concealment of a fact
- Promise made without any intention to perform it
- Any other act fitted to deceive
- Any act or omission as the law specifically declares to be fraudulent
What is misrepresentation and mistake
When a Party to an Agreement makes a false statement of fact, believing it to be true or makes a misleading statement, which he knows to be untruthful and the other Party to the contract acts upon the same, it is considered as misrepresentation. Misrepresentation is wilful or intentional, done for reaping unlawful gains.
Mistake is an inadvertent error on the part of the person committing it.
What is the impact on an Agreement if it is not made by free consent
When the consent to an Agreement is caused by coercion, undue influence, fraud or misrepresentation, it is voidable at the option of the Party whose consent was so caused. When the consent to an Agreement is caused by mistake as to a matter of fact essential to an Agreement, the Agreement is void.
If consent is caused by fraud or misrepresentation and the other party had the means to discovering the same with ordinary due diligence, then the Agreement is not voidable.
The above article provides a general overview on the topic. For further information with respect to free consent and its impact on an Agreement, kindly contact services@jneela.com.
