154 



FRAUDULENT CONTRACTS. 



Made by a 

 bidder at au 

 Auction. 



Representa- 

 tion not 

 known to be 

 true. 



A well- 

 grounded 

 belief. 



Delusion 

 affecting the 

 Contract. 



Representa- 

 tion to pre- 

 vent inquiries. 



plaintiff iDOUglit him, and lie turned out to be unservice- 

 able. It was held that the plaintiff was entitled to recover 

 damages from the defendant, as the Jiuy were satisfied 

 that the defendant knew of the falseness of the representa- 

 tions, and that the fact of the sale haA'ing been made by 

 an Auctioneer made no difference (o). 



Where the purchaser and his friend were the only bid- 

 ders at an Auction, the rest of the company being deterred 

 from bidding by the purchaser's stating to them that he 

 had a claim against, and had been ill-used hy, the late 

 owner of the article, it was held that such pui"chaser did 

 not acqiure any property against the vendor imder such 

 sale [j)). 



It signifies nothing A\'liether a man represents a thing 

 to be different from what he Icnoics it to be, or whether he 

 makes a representation which he does not k)ww at the time 

 to be true or false, if in point of fact it funis out to be 

 false (q) ; because there may undoubtedly be a fraudulent 

 Representation, if made dishonestly, of that which the 

 party does not know to be initrue, if he does not know it 

 to be true, or at least has not good grounds for helieving it 

 to be true (r). 



But to render a person liable to an action for false and 

 fraudulent representations, it is not enough to show that 

 the representations are false. If he acted upon a fair and 

 reasonably well-grounded belief that they were true, he is 

 not responsible for them, however unfounded they may 

 tmni out to be is). 



It has been held that even the mere knowledge that the 

 other party is labouring under a Delusion which materially 

 affects the Contract, wdien the vendor suffers him to be 

 operated upon by that Delusion, makes the contract 



void(0. 



The seller, however, is undoubtedly liable, where he 

 makes such 3Iisrepresentation as induces the buyer to for- 

 bear making those inquiries, which for his own seciu'ity 

 and advantage he would otherwise have made (u). 



(o) Bardell v. Spinhs, 2 C. & K. 

 646. But see Hopkins v. Tanqmray, 

 23 L. J., C. P. 162, ante, p. 140. 



(j^j) Fuller V. Abrahams, 3 B. & 

 Bing. 116. 



(-7) Per Lord Mansfield, C. J., 

 Schneider v. Heath, 3 Camp. 508. 



[r) Per Parke, B., Taylor v. Ash- 

 ton, 11 M. & "W. 413; and per Lord 



Cairns in Eeesc Hirer Silrer Mining 

 Co. V. Smith, L. R., 4H. L. 64, 69; 

 39 L. J., Ch. 849. 



(.s) Shreivsbary v. Blount, 2 Scott, 

 N. R. 588. 



{t) mil V. Gray, 1 Stark. N. P. 

 C. 434. 



('() Per Lord EUenborough, C. J., 

 T< rnon v. Keys, 12 East, 367. 



