# The Indian Contract Act, 1872, Section 17: "Fraud" defined

- Act: The Indian Contract Act, 1872 (Act 9 of 1872)
- In force from: 1872-09-01
- Ministry: Ministry of Law and Justice
- Source URL: https://indiacode.ecourtsindia.com/contract-act/section/17/

## Text

"Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent1 , with intent to deceive another party thereto of his agent, or to induce him to enter into the contract:— (1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact; (3) a promise made without any intention of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent. Explanation.—Mere silence as to facts likely to affect the 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 speak2 , or unless his silence is, in itself, equivalent to speech. Illustrations (a) A sells, by auction, to B, a horse which A knows to be unsound. A says nothing to B about the horses unsoundness. This is not fraud in A. (b) B is As daughter and has just come of age. Here, the relation between the parties would make it As duty to tell B if the horse is unsound. (c) B says to A—"If you do not deny it, I shall assume that the horse is sound." A says nothing. Here, As silence is equivalent to speech. (d) A and B, being traders, enter upon a contract. A has private information of a change in prices which would affect Bs willingness to proceed with the contract. A is not bound to inform B.

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