Essentials of Fraud

TANMOY MUKHERJI INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherji

Advocate

Essentials of Fraud-

Tanmoy Mukherji

Advocate

For an act to amount to fraud, the following elements must be present:

1.False Representation- A statement must be made which is false. It may be oral, written, or even implied by conduct.

2.Knowledge of Falsity (Scienter)-The person making the representation must know it is false, or must not believe it to be true, or must assert it recklessly without caring whether it is true or false.

3.Intention to Deceive-The false statement must be made with the intention of deceiving the other party or inducing them into a contract.

4.Active Concealment of Facts- Hiding material facts which one is legally bound to disclose also amounts to fraud. Mere silence is not fraud, unless there is a duty to speak (e.g., fiduciary relationships, contracts of utmost good faith like insurance).

5.Representation Made to the Other Party- The misrepresentation or concealment must be made to the party who is entering into the contract, or their agent.

6.The Other Party Must Rely on It- The person deceived must have relied on the fraudulent statement or concealment while entering into the contract.

7.Resulting Damage- The fraud must have caused loss, damage, or disadvantage to the party relying on the false representation.

Illustrative Case Laws-