Mindyard | It is essential to the creation of a contract that both parties should agree to the same thing in the same sense. Mutual consent, which should also be a free consent, is the sine qua non of a valid agreement and one of its essential elements is that a thing is understood in the same sense by a party as is understood by the other. Not only consent, but free consent is provided in Section 10 of the Indian Contract Act, 1872 to be necessary to the complete validity of a contract. Consent is free when it works without obstacles to impede its exercise. Where there is no consent or no real and certain object of consent, there can be no contract at all. Where there is consent, but not free consent, there is generally a contract voidable at the option of the party whose consent was not free. A general averment that consent was not freely obtained is not enough, and it is necessary to set up one of the vitiating elements such as fraud which includes, false assertion, active concealment, promise without intention of performing it, any other deceptive act, or any act declared as fraudulent. In order to constitute fraud, the act should have been done by the party to the contract, or by any other person with his connivance, or by his agent and with intent to deceive the other party thereto or his agent, or to induce him to enter into the contract. There is no duty upon parties to speak about facts likely to affect the other party’s consent to the contract and mere silence does not amount to fraud, unless the circumstances of the case show that there is duty to speak, or silence is, in itself equivalent to speech. On the other hand, misrepresentation falls into three categories: (i) a statement of fact, which if false, would be misrepresentation if the maker believes it to be true, but which is not justified by the information he possesses; (ii) any breach of duty which gains an advantage to the person committing it by misleading another to his prejudice, there being no intention to deceive; and (iii) causing a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement, even though done innocently. Which of the following statements correctly depicts the essentials of misrepresentation? A misrepresentation is a positive statement of fact, which is made or adopted by a party to a contract and is untrue., Misrepresentation and false representation do not mean the same., If one party has induced the other to enter into a contract by misrepresenting, though innocently, any material fact especially within his own knowledge, the party misled cannot avoid the contract., A misrepresentation is a negative statement of fact, which is made or adopted by a party to a contract and is true.

It is essential to the creation of a contract that both parties should agree to the same thing in the same sense. Mutual consent, which should also be a free consent, is the sine qua non of a valid agreement and one of its essential elements is that a thing is understood in the same sense by a party as is understood by the other. Not only consent, but free consent is provided in Section 10 of the Indian Contract Act, 1872 to be necessary to the complete validity of a contract. Consent is free when it works without obstacles to impede its exercise. Where there is no consent or no real and certain object of consent, there can be no contract at all. Where there is consent, but not free consent, there is generally a contract voidable at the option of the party whose consent was not free. A general averment that consent was not freely obtained is not enough, and it is necessary to set up one of the vitiating elements such as fraud which includes, false assertion, active concealment, promise without intention of performing it, any other deceptive act, or any act declared as fraudulent. In order to constitute fraud, the act should have been done by the party to the contract, or by any other person with his connivance, or by his agent and with intent to deceive the other party thereto or his agent, or to induce him to enter into the contract. There is no duty upon parties to speak about facts likely to affect the other party’s consent to the contract and mere silence does not amount to fraud, unless the circumstances of the case show that there is duty to speak, or silence is, in itself equivalent to speech. On the other hand, misrepresentation falls into three categories: (i) a statement of fact, which if false, would be misrepresentation if the maker believes it to be true, but which is not justified by the information he possesses; (ii) any breach of duty which gains an advantage to the person committing it by misleading another to his prejudice, there being no intention to deceive; and (iii) causing a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement, even though done innocently.

Which of the following statements correctly depicts the essentials of misrepresentation?

Options

A misrepresentation is a positive statement of fact, which is made or adopted by a party to a contract and is untrue.

Misrepresentation and false representation do not mean the same.

If one party has induced the other to enter into a contract by misrepresenting, though innocently, any material fact especially within his own knowledge, the party misled cannot avoid the contract.

A misrepresentation is a negative statement of fact, which is made or adopted by a party to a contract and is true.

Correct Answer :

Option A

A misrepresentation is a positive statement of fact, which is made or adopted by a party to a contract and is untrue.

Solution :

Correct Answer: A misrepresentation is a positive statement of fact, which is made or adopted by a party to a contract and is untrue.

Step-by-Step Explanation:

1. Understanding Consent and Misrepresentation:

According to Section 10 of the Indian Contract Act, 1872, free consent is an essential element for a valid contract. Misrepresentation is one of the vitiating factors that affects free consent, rendering a contract voidable at the option of the aggrieved party.

2. Analyzing the Passage Details:

The passage explicitly categorizes misrepresentation into three instances:

(i) A positive assertion/statement of fact, which is false, made by a person who believes it to be true, but where the statement is not justified by the information possessed by that person.

(ii) Any breach of duty which gains an advantage by misleading another to their prejudice, without an intent to deceive.

(iii) Innocently causing a party to make a mistake as to the substance of the subject matter of the agreement.

3. Evaluating the Options:

• Correct Option: "A misrepresentation is a positive statement of fact, which is made or adopted by a party to a contract and is untrue." This accurately captures the essential nature of a misrepresentation as an untrue positive assertion of fact made without justification.

• Incorrect Options: Describing misrepresentation as a "negative statement of fact" that is "true" or claiming that the misled party "cannot avoid the contract" contradicts the fundamental legal principles provided in the text.

Thus, the essential characteristic of misrepresentation is that it involves an untrue positive statement of fact made by a party to the contract.

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