WHAT IS FRAUD

EFFECTS OF FRAUD ON THE VALIDITY OF CONTRACT OR REMEDIES

The injured can rescind the contract, but it must be done within a reasonable lime.

4. ACT UPON CONTRACT

The second option is that the defrauded party may act upon the contract and may ask the other party to fiilfil [he Terms and conditions of the contract

3. SUIT FOR DAMAGES

The third opiion is that defrauded party can file a suit for damages

(4) MISREPRESENTATION

Misrepresentation means umis-staiemeni of fads In   other  wordaT it  means  to  conceal   the   facts deliberately about something in such a way that olher party ma> be induced and become ready to do the cpntract

CASES OOllSREPFEESEfrTATlON

(1)         Unwarranted statements

(2)       Breach of duty

(3)          Mistake about subject

A says to B that his cow gives 15 liters rnilk per day and induces to purchase his cow It turns out fhat cow only gives 5 liters milk So A is guilty of misrepresentation.

ESSENTIALS OF MISREPRESENTATION

(1)       The representation must be made without any desire. to deceive the other party   It may be express or implied.    

(2)      Misrepresentation must relate to the facts essentials

to the contract

(3)      The misrepresentation must have become untrue

(4)      The misrepresentation must have become the cause in inducing the other party enter into a contract.

EFFECTS OF MISREPRESENTATION ON THE VALIDITY OF CONTRACT

.L-  VOIDABLE

Incase of misrepresentation the contract is voidable at the option of the party whose consent is caused.

1,       ACCEPTABLE

The contract may be accepted by the aggrieved

party

(5)    MISTAKE

Any kind of fault regarding the facts of a thing for which contract is mads or provisions of law is known as mistake.

Seclion 20 ofthe Contract Act defines

“Where both the parties to an agreement are under mistake as to the mailer of fart essential to the agreement the agreement is void ”

KINDS OF MISTAKE

Mistake of Foreign law

Mistake of Private Rights

1.       MISTAKE OF FACTS

When any one or both the parties to the contract are under mistake as to matter of Fact, essential to an agreement, it is known as mistake of fact and is of kinds

When both the parties to an agreement are under a mistake as [o a mailer of fact, essential to an agreemenl, it 15 bilateral

(ii)       UNILATERAL MISTAKE

When only one parly utkfar is under a mistake as to
Ihe matter of fact, it is unilateral mistake.

2.       MISTAKE OF LAW

 MISTAKE OF PAKISTANI LAW

Any mistake regarding the provisions of any law enforceable in Pakistan is a mistake of Pakistani law. According to section 21, a contract caused by such mistake is valid because it is supposed that every one knows law of his country.

MISTAKE OF FOREIGN

Any mistake as to law not enforceable in Pakistan is mistake of foreign law and has the same effect as the mistake of fact According to section 21, when bom the parties to the contract are under mistakes as t.o foreign law, the contract is void.

MISTAKE OF PRIVATE

A mistake of private rights is treated as mistake of facr and is excusable If a contract is made in ignorance of private rights, it would be void.

Q. DISTINGUISH BETWEEN CO-ERCION AND UNDUE INFLUENCE?

DIFFERENCE BETWEEN COERCION AND UNDUE INFLUENCE

L ft   BY MEANING

(a) In case of coercion, one party obtains the consent of the other party by threatening him or putting physical pressure on him. .

(b) In case of undue influence, one party has dominating position over the other party.

(a)       Coercion is forbidden by Pakistan Penal code.

fb)       About undue influence Pakistan penal code *s silent (3

(aj       In case of coercion, consent is obtained by physical

pressure.

(b) In case of undue influence, consent is obtained by moral pressure

(4} PRESSL’SING PARTY

(a)       Any party who may not be of the contracting party may apply coercion

(b)       Undue influence is used only by the contracting party.

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