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Consider the following statements with regard to "uberrima fides": 1. It falls within a class of cases,…

Uberrima fides means utmost good faith and marks a special class of contracts, such as insurance, in which a party must disclose all material facts. Ordinary contracts carry…

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Consider the following statements with regard to "uberrima fides":
1. It falls within a class of cases, which require utmost good faith.
2. Every contract is a contract "uberrima fides".
3. Contract of insurance is an example of "uberrima fides". Of these statements:

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Answer and explanation

Correct answer B

Uberrima fides means utmost good faith and marks a special class of contracts, such as insurance, in which a party must disclose all material facts. Ordinary contracts carry no such duty: under the Explanation to section 17 of the Indian Contract Act, mere silence is not fraud unless there is a duty to speak. So statements 1 and 3 are correct and statement 2 is wrong; the Supreme Court applied the principle to insurance in Satwant Kaur Sandhu (2009).

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