Comprehension
It is essential to the creation of a contract that both parties should agree to the same thing in the same sense. Mutual consent, which should also be a free consent, is the sine qua non of a valid agreement and one of its essential elements is that a thing is understood in the same sense by a party as is understood by the other. Not only consent, but free consent is provided in Section 10 of the Indian Contract Act, 1872 to be necessary to the complete validity of a contract. Consent is free when it works without obstacles to impede its exercise. Where there is no consent or no real and certain object of consent, there can be no contract at all. Where there is consent, but not free consent, there is generally a contract voidable at the option of the party whose consent was not free. A general averment that consent was not freely obtained is not enough, and it is necessary to set up one of the vitiating elements such as fraud which includes, false assertion, active concealment, promise without intention of performing it, any other deceptive act, or any act declared as fraudulent. In order to constitute fraud, the act should have been done by the party to the contract, or by any other person with his connivance, or by his agent and with intent to deceive the other party thereto or his agent, or to induce him to enter into the contract. There is no duty upon parties to speak about facts likely to affect the other party’s consent to the contract and mere silence does not amount to fraud, unless the circumstances of the case show that there is duty to speak, or silence is, in itself equivalent to speech. On the other hand, misrepresentation falls into three categories: (i) a statement of fact, which if false, would be misrepresentation if the maker believes it to be true, but which is not justified by the information he possesses; (ii) any breach of duty which gains an advantage to the person committing it by misleading another to his prejudice, there being no intention to deceive; and (iii) causing a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement, even though done innocently.
Question: 1
Which of the following statements correctly depicts the essentials of misrepresentation?
Which of the following statements correctly depicts the essentials of misrepresentation?
Updated On: Jul 15, 2026
- A misrepresentation is a positive statement of fact, which is made or adopted by a party to a contract and is untrue
- Misrepresentation and false representation do not mean the same
- If one party has induced the other to enter into a contract by misrepresenting, though innocently, any material fact especially within his own knowledge, the party misled cannot avoid the contract
- A misrepresentation is a negative statement of fact, which is made or adopted by a party to a contract and is true.
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The Correct Option is A
Approach Solution - 1
The correct Answer is (A):A misrepresentation is a positive statement of fact, which is made or adopted by a party to a contract and is untrue
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This question is about identifying which statement correctly captures the legal definition of misrepresentation.
- Option A: This matches the accepted definition: misrepresentation is a positive statement of fact, something actually asserted, not left unsaid, made or adopted by a party to the contract, that turns out to be untrue. Every part of this description lines up with how misrepresentation is defined in contract law.
- Option B: Misrepresentation is essentially a form of false representation, an untrue statement of fact given as true. Treating the two as meaning different things does not match how the terms are actually used.
- Option C: This gets the legal consequence backwards. When one party is innocently misled by a misrepresentation of a material fact especially within the other party's own knowledge, the misled party is generally entitled to avoid the contract, not barred from avoiding it.
- Option D: This flips both key features of the correct definition: misrepresentation is a positive statement, not a negative one, and it must be untrue, not true. A statement that is both negative in form and actually true would not mislead anyone in the first place.
The only option that correctly states both the form, a positive statement, and the quality, untrue, of a misrepresentation is the first one.
So the correct answer is Option A: A misrepresentation is a positive statement of fact, which is made or adopted by a party to a contract and is untrue.
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Question: 2
Consider the statements given below and answer which one correctly describes a fraudulent act.
(I) The expression fraud means an intention to deceive, whether it is from any expectation of advantage to the party himself or from ill will towards the other is immaterial.
(II) A fraud is an act of deliberate deception with the design of securing something by taking an unfair advantage of another. It is a deception to gain from another’s loss.
(III) Fraud arises out of deliberate active role of representator about a fact.
Consider the statements given below and answer which one correctly describes a fraudulent act.
(I) The expression fraud means an intention to deceive, whether it is from any expectation of advantage to the party himself or from ill will towards the other is immaterial.
(II) A fraud is an act of deliberate deception with the design of securing something by taking an unfair advantage of another. It is a deception to gain from another’s loss.
(III) Fraud arises out of deliberate active role of representator about a fact.
(I) The expression fraud means an intention to deceive, whether it is from any expectation of advantage to the party himself or from ill will towards the other is immaterial.
(II) A fraud is an act of deliberate deception with the design of securing something by taking an unfair advantage of another. It is a deception to gain from another’s loss.
(III) Fraud arises out of deliberate active role of representator about a fact.
Updated On: Jul 15, 2026
- (I), (II) are correct
- (I) correct.
- (I), (II), (III) are correct.
- (I) and (II) are correct but (III) is incorrect.
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The Correct Option is C
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The correct Answer is (C):(I), (II), (III) are correct.
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This question gives three statements about fraud and asks which combination of them is correct.
- Statement I: Fraud requires an intention to deceive, and it does not matter whether the wrongdoer stood to gain personally or acted purely out of ill will towards the other party. The law looks at the intent to deceive, not the motive behind it, so this statement is correct.
- Statement II: This describes fraud as a deliberate act of deception carried out to gain an unfair advantage over another, essentially profiting at another's expense through dishonesty. This matches the accepted understanding of fraud as an intentional, self-serving deception, so it is also correct.
- Statement III: Fraud generally requires the wrongdoer to actively represent something as a fact, rather than simply staying quiet, since mere silence is ordinarily not enough to amount to fraud, except in the narrow situations where there is a duty to speak, or silence is itself equivalent to speech. Because fraud is normally built on this kind of active false representation, this statement is correct as well.
- Why the other combinations fail: Any option that leaves out Statement III, or restricts the correct set to only Statement I, does not account for the fact that all three statements independently describe accurate features of fraud.
Since Statements I, II, and III are each an accurate description of fraud on their own, all three together are correct.
So the correct answer is Option C: (I), (II), (III) are correct.
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Question: 3
Which of the following statements is correct?
Which of the following statements is correct?
Updated On: Jul 15, 2026
- Fraud is an innocent wrong whereas misrepresentation is an intentional wrong.
- The principal difference between fraud and misrepresentation is that in the former, the person making the suggestion does not believe it to be true and, in the latter, he believes it to be true
- In fraud and misrepresentation both, it is not a misstatement of fact which misleads the promisee
- Fraud and misrepresentation both are innocent wrongs
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The Correct Option is B
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The correct Answer is (B):The principal difference between fraud and misrepresentation is that in the former, the person making the suggestion does not believe it to be true and, in the latter, he believes it to be true
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This question asks which statement correctly draws the line between fraud and misrepresentation.
- Option A: This reverses the actual roles of the two terms. Fraud is the intentional wrong, the maker knows or does not believe the statement is true, and misrepresentation is the innocent one, the maker honestly believes the statement is true. Calling fraud innocent and misrepresentation intentional swaps the two definitions.
- Option B: This correctly identifies the real dividing line, belief. In fraud, the person making the statement does not believe it is true, they know or suspect it is false and say it anyway. In misrepresentation, the person genuinely believes what they are saying is true, even though it turns out to be wrong. That difference in the maker's own state of mind is exactly what separates the two.
- Option C: Both fraud and misrepresentation are built around a false statement of fact that misleads the other party into contracting, that is the common ground between them. Saying that neither involves a misstatement of fact removes the very thing both concepts share.
- Option D: Fraud cannot be described as innocent, that is precisely what separates it from misrepresentation. Calling both of them innocent wrongs erases the distinction the question is asking about.
The real difference between the two concepts comes down to what the maker of the statement believed at the time, not innocent, and that is what Option B correctly captures.
So the correct answer is Option B: The principal difference between fraud and misrepresentation is that in the former, the person making the suggestion does not believe it to be true and, in the latter, he believes it to be true.
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Question: 4
Mr. A sells a car to Mr. Y, his childhood friend with a knowledge that the car is defective. Before buying the car, Mr. Y says to Mr. A, “If you do not deny it, I shall assume that the car is perfect”. Mr. A says nothing. In light of the statement, decide the liability of Mr. A.
Mr. A sells a car to Mr. Y, his childhood friend with a knowledge that the car is defective. Before buying the car, Mr. Y says to Mr. A, “If you do not deny it, I shall assume that the car is perfect”. Mr. A says nothing. In light of the statement, decide the liability of Mr. A.
Updated On: Jul 15, 2026
- A’s silence is equivalent to speech and hence a misrepresentation.
- A is not liable for fraud, but liable for misrepresentation.
- A is liable for fraud and misrepresentation both
- A’s silence is equivalent to speech and hence a fraud.
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The Correct Option is D
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The correct Answer is (D):A’s silence is equivalent to speech and hence a fraud.
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This question tests what happens when a seller who already knows about a defect stays silent after the buyer explicitly says that silence will be taken as confirmation the goods are fine.
- Option A: Misrepresentation requires the maker to honestly believe what is being conveyed is true. A already knew the car was defective, so there is no honest belief here at all, which rules out treating this as a mere innocent misrepresentation.
- Option B: This gets the two concepts backwards. Since A knew about the defect and still let Y's assumption of a perfect car stand unchallenged, that is dishonest silence with knowledge of the truth, which points towards fraud, not the other way around.
- Option C: A single act of silence, judged against one specific representation Y made, cannot simultaneously be an innocent belief, misrepresentation, and a dishonest one, fraud. Only one of the two can describe the same state of mind at the same moment, so charging A with both together is not a coherent legal position on these facts.
- Option D: Y's statement, if you do not deny it, I shall assume the car is perfect, turned A's silence into something more than mere non-disclosure. By staying quiet after being put on express notice that silence would be read as a confirmation, A effectively made a false assertion through that silence, and since A already knew the car was defective, that assertion was dishonest. This is why silence here is treated as equivalent to speech, and equivalent to fraud.
Because A had actual knowledge of the defect and let a direct, specific assumption of soundness go unchallenged, A's silence functions as an active false statement rather than passive non-disclosure.
So the correct answer is Option D: A's silence is equivalent to speech and hence a fraud.
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Question: 5
In which of the following statements will a contract not be voidable at the option of a party?
In which of the following statements will a contract not be voidable at the option of a party?
Updated On: Jul 15, 2026
- When a party takes consent by fraud
- When a party takes consent by misrepresentation.
- A contract entered by fraud and misrepresentation is neither void nor voidable
- When silence amounts to fraud, but the other party whose consent was taken had discovered the truth or had the means of discovering the truth with ordinary diligence
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The Correct Option is D
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The correct Answer is (D):When silence amounts to fraud, but the other party whose consent was taken had discovered the truth or had the means of discovering the truth with ordinary diligence
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This question asks in which situation a contract will NOT be voidable even though consent was affected.
- Option A: As a general rule, a contract where consent was obtained by fraud is voidable at the option of the party wronged, so this describes a case where the contract normally would be voidable, not one where it would not be.
- Option B: Consent obtained through misrepresentation likewise ordinarily makes the contract voidable at the option of the misled party, so this too falls under the general voidable rule rather than an exception to it.
- Option C: Saying a contract induced by fraud or misrepresentation is neither void nor voidable misstates the basic position, such a contract is generally voidable at the wronged party's option, it is not simply left with no consequence at all.
- Option D: The law carves out a specific exception here: even where silence amounted to fraud, if the party whose consent was taken already had actual knowledge of the truth, or had the means to discover it through ordinary diligence, the contract is not voidable on that ground. The idea is that the law protects a party from being misled, not a party who could have easily found out the truth themselves but simply did not bother.
Because Option D describes the one recognised exception where a party had the means to discover the truth themselves, that is the situation where the contract stays binding rather than becoming voidable.
So the correct answer is Option D: When silence amounts to fraud, but the other party whose consent was taken had discovered the truth or had the means of discovering the truth with ordinary diligence.
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Top CLAT Questions
- In the realm of contemporary literature, the interplay between character and setting is a nuanced dance that shapes the narrative’s essence. The setting, often described with painstaking detail, becomes more than a backdrop; it becomes a character, influencing the plot and character development.
Consider, for instance, the barren expanse of the desert in Jhumpa Lahiri’s The Namesake. The arid landscape mirrors the sense of isolation felt by the protagonist, Gogol, as he navigates his identity crisis in a foreign land. The relentless sun and vast sands are not mere descriptions; they are the silent witnesses to his inner turmoil.
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