Difference between Fraud and Misrepresentation under contract act

Difference between fraud and misrepresentation under contract act – In this article we will discuss the concept of fraud and misrepresentation and also differentiate fraud and misrepresentation under Indian contract act

What is Fraud?

Section 17 of the Indian Contract Act, 1872 defines Fraud
“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.

What is Misrepresentation?

Section 18 of the Indian Contract Act, 1872 defines Misrepresentation
“Misrepresentation” means and includes—

(1) the positive assertion, in a manner not warranted by
the information of the person making it,
of that which is not true, though he believes it to be true;
(2) any breach of duty which, without an intent to deceive,
gains an advantage to the person
committing it, or any one claiming under him;
by misleading another to his prejudice, or
to the prejudice of any one claiming under him;
(3) causing, however innocently,
a party to an agreement,
to make a mistake as to the substance
of the thing which is the subject of the agreement.

Difference between Fraud and Misrepresentation under contract act

Sr. NoFraudMisrepresentation
1Fraud Defined under Section 17 of the Indian Contract Act, 1872 Misrepresentation under Defined Section 18 of the Indian Contract Act, 1872
2In fraud the main factor is intention to Deceive the other partyIn Misrepresentation intention is absent
3In fraud, the aggrieved party can repudiate the contract and claim damages.
In Misrepresentation, the aggrieved party entitled to repudiate the contract but can not claim the damages and contract is voidable
4Burden of proof lies on aggrieved partyBurden of proof lies on the person making false representation of material facts

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