Sunday, January 3, 2016


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It is a willful misrepresentation made by a party with intent to deceive another party through inducing such party into the contract believing that a thing is true which is untrue or false in reality. It means fraud is misrepresentation with bad or what we called in legal term mala fid intention. Such misstatement is made knowingly by a party to deceive another party through the intended transaction under the contract made.
To say, A party to the contract or his/her agent shall be deemed to have committed fraud if he/she, leads the other party or his/her agent to believe or takes any action to believe the particular matter is true, although he/her knows that it is fake, or suppress any information in his/her possession, or in indulging in any other fraudulent act punishable under prevailing law, with the intention of deceiving the opposite party or his/her agent. According to this explanation it includes anyone of the following situation if committed by one party of the contract or his agent with a view to deceiving another party or his agent:

1.       To induce other party to believe that a false act is as a true one.
2.       2 To conceal actively about any truth in relation to fact.
3.       3 To do any act that conveys other party to believe false as true, and
4.       4 To do some such acts that is declared to be fraudulent by the current Nepalese law.

The Indian contract Act, 1872 section 17 mentions about it that the fraud includes any of the following acts committed by a party to a contract, or with his connivance or by his agent, with intent to deceive another party thereto or his agent or to induce him to enter into the contract:

1.       The suggestion as to fact of that which is not true by one who does not believe it to be true
2.       The active concealment of a fact by one having knowledge or belief of fact
3.       A promise made without any intention of performing it
4.       Any other act  fitted to deceive
5.       Any such act or omission as the law specially declares to be fraudulent.

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