Wednesday, October 24, 2007

Contract Act_Practical Problems_52

fraudulently informs B that A's estate is free from encumbrance. B there- upon buys the estate. The estate is subject to a mortgage. Is it a void or voidable contract? State reasons.

The contract in question shall be voidable at the option of B. As per the given facts, the fact of the estate being subject to mortgage was actively concealed by A. Such an active concealment amount to fraud as per Section 17 state and Section 19 of the Indian Contract Act declares contract affected by fraud voidable at the option of the aggrieved party. Hence, contract in question is not void but voidable at the option of B.

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