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CSEET · Business Laws and Management · Elements of Law of Contracts

Ravi fraudulently tells Meera that his plot in Pune is free from any mortgage, and Meera buys it. The plot is in fact mortgaged. Which statement is correct under the Indian Contract Act, 1872?

Meera may either avoid the contract or insist that it be performed with the mortgage debt redeemed. Consent caused by fraud makes the agreement voidable at the option of the deceived party, not void, so Ravi cannot avoid it.

  1. AThe contract is void from the beginning and Meera has no option
  2. BMeera may avoid the contract, or insist on its being carried out and the mortgage debt redeemedCorrect
  3. COnly Ravi may avoid the contract
  4. DThe contract is valid and Meera has no remedy

Explanation

Section 19 provides that where consent is caused by fraud, the contract is voidable at the option of the deceived party. That party may also insist on performance and be put in the position as if the representation were true, as in the illustration on the unencumbered estate. Option A is wrong because the contract is voidable, not void.

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