Multiple choice

If X enters into a contract with Y for which Y is guilty of fraud, then X can

  1. set aside the contract but cannot recover damages

  2. only recover damages

  3. set aside the contract and can recover damages also

  4. none of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Option (3) is correct. If there is a fraud, then the contract can be set aside and damages can also be recovered. In case of misrepresentation, the damages can’t be asked for. Damages can be asked for when there is a breach of warranty.

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