Fraud, Misrepresentation, and Mistake in Indian Contract Law

Abstract This chapter examines fraud, misrepresentation and mistake as contractual vitiating factors in Indian law. It advances three main arguments. First, the provisions of the Indian Contract Act 1872 that govern fraud and misrepresentation suffer from a drafting flaw. Once the drafting error is recognized, it is clear that the Act regulates the contractual consequences of fraud and misrepresentation in two stages: a consent-based first stage and a more pluralistic second stage. Second, the second paragraph of section 19 of the Act allows a mis-representee to claim that he be ‘put in the position in which he would have been if the representations made had been true’. This provision treats all pre-contractual representations as though they were enforceable promises. This is indefensible. Third, nineteenth century English Courts were faced with the task of reconciling Pothier’s ‘will theory’ with the English doctrine of objectivity. This conflict is also reflected in the Act. Understanding this tension has the potential to yield significant insights into the way in which the Act regulates mistakes.