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A sells B a horse at an auction. A knows the horse is unsound but says nothing about it. A has no duty…

The explanation to section 17 provides that mere silence is not fraud unless there is a duty to speak or the silence is equivalent to speech. Illustration (a) applies that…

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A sells B a horse at an auction. A knows the horse is unsound but says nothing about it. A has no duty to disclose the unsoundness, and the circumstances do not make the silence equivalent to a statement. What is the legal effect of A's silence under the Indian Contract Act, 1872?

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Answer and explanation

Correct answer C

The explanation to section 17 provides that mere silence is not fraud unless there is a duty to speak or the silence is equivalent to speech. Illustration (a) applies that rule to an auction sale of a horse known by the seller to be unsound. There is no positive assertion, breach of duty or inducement of a mistake by other conduct on these facts. The sale also involves no threat or unlawful detention.

Option feedback

Option A

The facts establish mere silence without either exception in section 17.

Option B

The facts show no assertion or other conduct amounting to misrepresentation under section 18.

Option C

The explanation to section 17 and illustration (a) give this result.

Option D

The facts show no threat, prohibited act or unlawful detention of property amounting to coercion.

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