Multiple choice

Directions: Given below is a statement of principle, followed by a factual situation. Apply the principle to the facts and select the most appropriate answer among three alternatives given. Encircle your choice and explain why you think your answer is correct in not more than 3 to 4 lines. If it exceeds 4 lines, then penalty may be imposed.

Principle: When a person represents to another something as a true fact, knowing fully well that it is not true, he is guilty of fraud. The person subjected to fraud may avoid an agreement.

Facts: A presents a horse for sale. The horse is kept on display so that anyone interested could examine it. The horse has a cracked hoof and it is cleverly concealed by the owner. B tells A “If you do not deny it, I shall assume that the horse is sound”. A keeps silent. B purchases the horse.

  1. B can avoid the agreement on discovery of the defect.

  2. B cannot avoid the agreement, as the horse was on display and he could have satisfied himself of its soundness by personal examination.

  3. B cannot avoid the agreement as A did not make any representation to mislead him. He merely kept silent so that B could find things out by himself.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Because the facts state that the defect was cleverly concealed, which means it was not easily detectable. Also, B's statement imposes a duty on A to speak and so when A holds his silence, he deceives B.

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