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.