19. Voidability of agreements without free consent

When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.

A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.

Exception — If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.

Explanation — A fraud or misrepresentation which did not cause the consent to a contract of the party on whom such fraud was practised, or to whom such misrepresentation was made, does not render a contract voidable.

Contracts 26

Illustrations

A, intending to deceive B, falsely represents that 500 gantangs of indigo are made annually at A’s factory and thereby induces B to buy the factory. The contract is voidable at the option of B.

A, by a misrepresentation, leads B erroneously to believe that 500 gantangs of indigo are made annually at A’s factory. B examines the account of the factory, which show that only 400 gantangs of indigo have been made. After this B buys the factory. The contract is not voidable on account of A’s misrepresentation.

B, having discovered a vein of ore on the estate of A, adopts means to conceal, and does conceal, the existence of the ore from A. Through A’s ignorance B is enabled to buy the estate at an undervalue. The contract is voidable at the option of A.

A is entitled to succeed to an estate at the death of B; B dies; C, having received intelligence of B’s death, prevents the intelligence reaching A, thus induces A to sell him his interest in the estate. The sale is voidable at the opinion of A.