Question:

Principle: Mere silence as to the facts likely to affect the willingness of a person to enter into a contract is not a fraud, unless the circumstances of the case are such that, on close examination, it is found to be the duty of the person keeping silent to speak, or unless his silence is, in itself, equivalent to speech.
Facts: X sells by auction to Y, a horse which X knows to be of unsound state of mind. X says nothing to V about the horse's unsound state of mind. Give the correct answer—

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Silence alone does not constitute fraud unless there is a legal obligation to disclose the fact.
Updated On: Aug 11, 2025
  • X can be held liable for fraud
  • X can be held liable for misrepresentation
  • X cannot be held liable, because he did not say anything positive about the mental state of the horse.
  • X cannot be held liable because it is the buyer who must be aware of the things.
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The Correct Option is C

Solution and Explanation

Under the principle, mere silence is not fraud unless there is a legal duty to disclose or the silence amounts to implied representation. Here, X did not make any false statement nor was there a duty to speak, so non-disclosure of the horse's mental condition does not make him liable for fraud or misrepresentation.
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