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CMA Foundation · Fundamentals of Business Laws and Business Communication · Capacity of Parties, Free Consent

Which of the following correctly states the effect of Section 19 on a contract in which consent was caused by fraud, and why is it different from a minor's agreement?

Under Section 19, a contract whose consent was caused by fraud is voidable at the option of the deceived party only. A minor's agreement is different because it fails the competence requirement of Sections 10 and 11, rather than suffering from defective consent.

  1. AThe contract is void from the start, just as a minor's agreement
  2. BThe contract is voidable at the option of the party whose consent was so caused, whereas a minor's agreement fails for lack of competence under Section 11Correct
  3. CThe contract can be avoided by either party, whereas a minor's agreement is enforceable
  4. DThe contract is valid and cannot be avoided, but a minor's agreement is voidable

Explanation

Section 19 says that where consent is caused by coercion, fraud or misrepresentation, the contract is voidable at the option of the party whose consent was so caused. Only that party can avoid it. A minor's agreement is a different problem, since it lacks the competence required by Sections 10 and 11.

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