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

Ravi's consent to buy a flat from Meena was caused by Meena's fraud. Which statement is correct under the Act?

The contract is voidable at Ravi's option because his consent was caused by fraud. He may rescind it, or he may insist that it be performed and be put in the position he would have occupied if Meena's representations had been true.

  1. AThe contract is void from the beginning and neither party can enforce it
  2. BThe contract is voidable at Ravi's option, and he may instead insist on performance and be put in the position as if the representations were trueCorrect
  3. CThe contract is voidable only at Meena's option
  4. DThe contract is valid and Ravi has no remedy

Explanation

Section 19 makes a contract caused by fraud voidable at the option of the party whose consent was so caused. That party may instead insist on performance and be placed in the position he would have been in had the representations been true. Option A is wrong because the contract is voidable, not void.

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