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CS Executive · Jurisprudence, Interpretation and General Laws · Contract Law

Sunita is told by Kapoor that a factory yields 500 units a year, though he honestly believes this to be true and it is false. Before buying, Sunita examines the factory accounts showing only 400 units. She still buys it. What is the position?

The contract is not voidable. Although Kapoor made an innocent misrepresentation, Sunita had the means of discovering the truth with ordinary diligence and in fact checked the accounts, so the misrepresentation did not cause her consent.

  1. AContract voidable, as misrepresentation induced it
  2. BContract void, as the fact was untrue
  3. CContract not voidable, as she had means of discovering the truth with ordinary diligence and used themCorrect
  4. DContract voidable only if Kapoor paid damages

Explanation

Under the exception to the voidability rule, if consent was caused by misrepresentation but the party had the means of discovering the truth with ordinary diligence, the contract is not voidable. Sunita actually examined the accounts, so her consent was not caused by the misstatement. Option A ignores this exception.

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