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DIFFRENCES BETWEEN FRAUD AND MISREPRESENTATION


Based on Section 17 of Contract Act, Fraud refers to certain acts which is intended to deceive another party or to induce him/her to enter into contract.

Fraud
- With an intention to deceive other party thus is a willful wrong.
- The person making the false statement but ownselves does not believe in it.
- The aggrieved party can sue the accused to claim damages.
- The aggrieved party can file a lawsuit to set aside the contract anytime. Hence,
fraudulent contract will never be a valid contract.
- A high standard of proof is required to set aside the contract.

Section 18 defines Misrepresentation as false statement made by one party which induces the other to enter into a contract, but the person who made such presentation thought it was true.

Misrepresentation
- Without any intention to deceive others thus is an innocent wrong.
- The person believes that the false statement is true. A result of being ignorant or
getting wrong information.
- The aggrieved party does not has the right to claim damages.
- The aggrieved party has to file a lawsuit within the specified time to set aside the
contract. If not, the contract is then a valid contract.
- Lower standard of proof is required to set aside the contract.