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A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?
- a)A can cancel the contract alleging fraud
- b)A cannot cancel the contract
- c)A can cancel the contract alleging undue influence
- d)A can claim damages
Correct answer is option 'B'. Can you explain this answer?
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A contracts with B to buy a necklace, believing it is made of pearls w...
Explanation:
The correct option is B i.e. A cannot cancel the contract.
Reasoning:
In this case, A entered into a contract with B to buy a necklace believing it is made of pearls whereas in fact, it is made of imitation pearls. B knew that A is mistaken but did not take any steps to correct the error. Now A wants to cancel the contract on the basis of fraud.
Fraud means an act of deliberate deception with the intention of securing an unfair or unlawful gain. In this case, there is no evidence of deliberate deception by B. B did not make any misrepresentation or false statement to A. A was mistaken about the nature of the necklace and B did not correct the mistake. However, this is not fraud because there was no intention to deceive A.
Therefore, A cannot cancel the contract on the basis of fraud. However, A may be able to cancel the contract on the basis of mistake or mutual mistake. If A can prove that the mistake was fundamental to the contract, i.e. if A would not have entered into the contract if he knew that the necklace was made of imitation pearls, then A may be able to cancel the contract.
In conclusion, A cannot cancel the contract on the basis of fraud, but may be able to cancel the contract on the basis of mistake or mutual mistake.
The correct option is B i.e. A cannot cancel the contract.
Reasoning:
In this case, A entered into a contract with B to buy a necklace believing it is made of pearls whereas in fact, it is made of imitation pearls. B knew that A is mistaken but did not take any steps to correct the error. Now A wants to cancel the contract on the basis of fraud.
Fraud means an act of deliberate deception with the intention of securing an unfair or unlawful gain. In this case, there is no evidence of deliberate deception by B. B did not make any misrepresentation or false statement to A. A was mistaken about the nature of the necklace and B did not correct the mistake. However, this is not fraud because there was no intention to deceive A.
Therefore, A cannot cancel the contract on the basis of fraud. However, A may be able to cancel the contract on the basis of mistake or mutual mistake. If A can prove that the mistake was fundamental to the contract, i.e. if A would not have entered into the contract if he knew that the necklace was made of imitation pearls, then A may be able to cancel the contract.
In conclusion, A cannot cancel the contract on the basis of fraud, but may be able to cancel the contract on the basis of mistake or mutual mistake.
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Community Answer
A contracts with B to buy a necklace, believing it is made of pearls w...
Mere silence is not a fraud
The seller is not liable to disclose the facts which affect the willingness of buyer
The seller is not liable to disclose the facts which affect the willingness of buyer
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A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?a)A can cancel the contract alleging fraudb)A cannot cancel the contractc)A can cancel the contract alleging undue influenced)A can claim damagesCorrect answer is option 'B'. Can you explain this answer?
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A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?a)A can cancel the contract alleging fraudb)A cannot cancel the contractc)A can cancel the contract alleging undue influenced)A can claim damagesCorrect answer is option 'B'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?a)A can cancel the contract alleging fraudb)A cannot cancel the contractc)A can cancel the contract alleging undue influenced)A can claim damagesCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?a)A can cancel the contract alleging fraudb)A cannot cancel the contractc)A can cancel the contract alleging undue influenced)A can claim damagesCorrect answer is option 'B'. Can you explain this answer?.
A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?a)A can cancel the contract alleging fraudb)A cannot cancel the contractc)A can cancel the contract alleging undue influenced)A can claim damagesCorrect answer is option 'B'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?a)A can cancel the contract alleging fraudb)A cannot cancel the contractc)A can cancel the contract alleging undue influenced)A can claim damagesCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?a)A can cancel the contract alleging fraudb)A cannot cancel the contractc)A can cancel the contract alleging undue influenced)A can claim damagesCorrect answer is option 'B'. Can you explain this answer?.
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ample number of questions to practice A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?a)A can cancel the contract alleging fraudb)A cannot cancel the contractc)A can cancel the contract alleging undue influenced)A can claim damagesCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice CA CPT tests.
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