Question

Principle: Mere silence as to facts likely to affect the decision of a person to enter into a contract is not fraud.
Facts: A sells to B (A’s daughter who is a minor) a horse which A knows to be unsound. A says nothing to B about the unsoundness of the horse.

• A. A has committed fraud
• B. A has committed no fraud
• C. There cannot be a contract between a father and daughter
• D. The daughter did not ask therefore the father did not tell, hence no fraud

Hint:

Silence in contracts does not amount to fraud unless there is an obligation to disclose the information.

Answer 1

The Correct Option is B

The principle states that silence about facts likely to affect a decision is not considered fraud unless there is an obligation to disclose. In this case, A did not inform B about the horse’s unsoundness, but there is no legal requirement for A to disclose this to B. Since A did not actively conceal any known fact, there is no fraud.
Thus, the correct answer is (B).
Option (A) is incorrect because no fraud is committed in this scenario. Option (C) is incorrect as the contract is valid despite the familial relationship. Option (D) is incorrect because the daughter did not need to ask in this case.

Answer 2

This question tests the boundary of what counts as fraud when a seller simply stays silent about a defect. Let's examine each option.

1. A has committed fraud: The principle specifically states that mere silence about facts likely to influence the decision to contract does not amount to fraud. A did not make any false statement or actively conceal the defect through some positive act, he simply said nothing about the horse's unsoundness, which the principle does not treat as fraud.
2. A has committed no fraud: A's conduct consisted purely of silence, not disclosing that the horse was unsound. Since the principle expressly excludes mere silence from the definition of fraud, and there is no indication A did anything beyond staying silent, no fraud has been committed.
3. There cannot be a contract between a father and daughter: The principle says nothing about family relationships barring contracts, and nothing here suggests any general rule against a father and daughter contracting; this option introduces a restriction that has no basis in the given principle.
4. The daughter did not ask therefore the father did not tell, hence no fraud: While the conclusion, no fraud, happens to match the correct outcome, the reasoning wrongly makes disclosure depend on whether the daughter asked. The principle's actual basis for excusing silence is that silence itself is not fraud, regardless of whether a question was posed.

Since A's conduct was limited to not volunteering information about the horse's condition, and the principle treats such silence as falling short of fraud, A has not committed fraud.

Therefore, the correct answer is A has committed no fraud.

Answer 3

The principle draws a narrow line: mere silence about a fact that might affect someone's decision to contract is not fraud, though it says nothing about active concealment or false statements, which would be a different matter altogether. Testing the options against exactly where the principle draws that line.

1. A has committed fraud: For fraud to arise, something beyond silence would need to be shown, an active step taken to conceal the horse's unsoundness or a false representation about it. A did neither; he simply said nothing, which is precisely the conduct the principle excludes from fraud.
2. A has committed no fraud: A's entire conduct consists of not mentioning the horse's condition. Since the principle expressly places mere silence outside the definition of fraud, and there is no additional act of concealment or misrepresentation described in the facts, A's silence alone cannot amount to fraud.
3. There cannot be a contract between a father and daughter: The principle addresses only the fraud question, whether silence counts as fraud, and says nothing about family relationships as a bar to contracting. This option answers a question the principle was never asked.
4. The daughter did not ask therefore the father did not tell, hence no fraud: This option reaches the same conclusion, no fraud, but for a reason the principle doesn't give. The principle exempts silence regardless of whether a question was ever posed; it does not condition the exemption on the buyer's failure to ask.

Testing A's conduct, saying nothing about the horse's unsoundness, against exactly what the principle excludes, mere silence, confirms no fraud on these facts.

Therefore, the correct answer is A has committed no fraud.