question_answer

Direction: The question consists of two statements, one labelled as PRINCIPLE and other as FACT. You are to examine the principle and apply it to the given facts carefully and select the best option.

Principle: Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech.

Fact: A sells, by auction, to B, a horse which A knows to be unsound A says nothing to B about the horse's unsoundness.

A) A can be held liable for fraud

B) A can be held liable for misrepresentation

C) A cannot be held liable, because he did not say anything positive about the soundness of horse.

D) A cannot be held liable because it is the buyer who must be aware of the things.