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. 'B' can take plea of fraud because she is minor.
• B. There can not be a contract between a father and daughter.
• C. 'A' has not committed fraud.
• D. 'A' has committed fraud.

Hint:

Fraud can occur when one party knowingly withholds information that would affect the other party’s decision.

Answer 1

The Correct Option is D

Since 'A' knew that the horse was unsound and did not disclose this to 'B', 'A' has committed fraud, as fraud involves the concealment of material facts. The fact that 'B' is a minor does not change the fraudulent act committed by 'A'.


Option (A) 'B' can take plea of fraud because she is minor: This is incorrect because fraud is the issue here, not the minor status.

Option (B) There can not be a contract between a father and daughter: This is incorrect. There is no such prohibition in law, but fraud in the contract is what matters.

Option (C) 'A' has not committed fraud: This is incorrect because 'A' did commit fraud by withholding information about the horse's unsoundness.