146 



FRAUDULENT CONTRACTS. 



Not fraud to 

 suppress what 

 there is no 

 duty to 

 communicate. 



Requisites to 

 an action for 

 false represen- 

 tation. 



Or on breach 

 of warranty. 



Caveat 

 emptor. 



due degree of caution, because mgilantihus non dormientihus 

 succurrunt jura (c). 



Therefore, to constitute fraud there must be an assertion 

 of something false within the knowledge of the person 

 asserting it, or the suppression of that which is true, and 

 which it teas his duty to communicate. So if a person pur- 

 chases an article which is to be manufactured for him, and 

 the manufacturer delivers it with a patent defect which 

 may render it worthless, if the purchaser has had an oppor- 

 tunity of inspecting it, but has neglected to do so, the 

 manufacturer is not guilty of fraud in not pointing out the 

 defect ((■/). 



In an action of deceit the plaintiff must prove actual 

 fraud. Fraud is proved when it is shown that a false 

 representation has been made knowingly, or without belief 

 in its truth, or recklessly, without caring whether it be true 

 or false (e). 



A false statement, made through carelessness and with- 

 out reasonable ground for believing it to be true, may be 

 evidence of fraud, but does not amount necessarily to fraud. 

 Such a statement, if made in the honest belief that it is 

 true, is not fraudulent, and does not render the person 

 making it liable to an action of deceit (/) . 



But to support an action ex contractu, for a breach of 

 warranty, it is not necessary to prove that the representa- 

 tion was false to the knowledge of the seller. It is 

 sufficient that it was false in fact. For where a warranty 

 is given, by which the party undertakes that the article sold 

 shall, in point of fact, be such as is described, no question 

 can be raised upon the scienter, upon the fraud or wilful 

 misrepresentation {g). 



If a purchaser, choosing to judge for himself, does not 

 avail himself of the knowledge or means of knowledge open 

 to him or to his agent, he cannot be allowed to say he was 

 deceived by the seller's representations, the rule being 

 caveat emptor, and the knowledge of his agent being as 

 binding on him as his own knowledge (h). 



(c) See Chit. Contr. 12th ed. 694 ; 

 Shrewsbury t. Blount, 2 Scott, N. E. 

 588. 



{d) Eorsfall v. Thomas, 1 H. & C. 

 90 ; Smith v. Hughes, L. R., 6 

 Q. B. 597 ; 40 L. J., Q- B. 221 ; 25 

 L. T., N. S. 329. 



(e) Berry r. Peek, 15 App. Cas. 

 337; 58 L. J., Ch. 864; 61 L. T., 



N. S. 265; 38 W. R. 33. 



{/) JDerry t. Peek, 15 App. Cas. 

 337; 58 L. J., Ch. 864; 61 L. T 

 N. S. 265; 38 W. R. 33. 



(g) Atttoood V. Small, 6 C. & F. 

 444, 445 ; Broom's Maxims, 4th ed. 

 756. 



(A) Attwood Y. Small, 6 C. & F. 

 232. 



