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A promises to supply goods on credit, intending all along not to perform, solely to induce B to enter into the contract. How does the Indian Contract Act, 1872 classify A's conduct?

Question and options

A promises to supply goods on credit, intending all along not to perform, solely to induce B to enter into the contract. How does the Indian Contract Act, 1872 classify A's conduct?

  1. Misrepresentation under section 18

  2. Undue influence under section 16

  3. Fraud under section 17

  4. Mistake of fact under section 20

Answer and explanation

Correct answer: C - Fraud under section 17

Section 17(3) of the Indian Contract Act, 1872 includes in fraud a promise made without any intention of performing it, when done to induce the other party to contract. It is not misrepresentation under section 18, which covers innocent statements believed to be true, and the contract is voidable at B's option under section 19.

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