FRAUDULENT CONTRACTS. 



153 



guilty of an offence against the Contagious Diseases 

 (Animals) Act, 1869, he was not liable to the plaintiff, as 

 his conduct in exposing the pigs for sale in the market did 

 not amount to a representation that they were free from 

 the disease. But if the defendant's statement had been 

 followed by a declaration that he believed the animals to 

 be free from disease, he would undoubtedly have been 

 liable to an action for deceit (i). 



Fraud does not make a contract void, but only voidable, 

 at the election of the party defrauded, who has the option 

 of acquiescing in it, or of avoiding it (w). But until the 

 party defrauded disaffirms the contract it remains good [n). 



If a party be induced to purchase an article by fraudulent 

 representations of the seller respecting it, he may treat it 

 as a good contract, or the moment he chooses to declare it 

 void, he may recover the price from the seller (o). 



If, when it is avoided, nothing has occurred to alter the 

 position of affairs, the rights and remedies of the parties are 

 the same as if it had been void from the beginning ; but if 

 any alteration has taken place, their rights and remedies 

 are subject to the effect of that alteration (p). Thus where 

 the plaintiff was induced by the fraud of the defendants to 

 become a shareholder in a company, it was held, that as he 

 had in the interval between the making of the contract and 

 the discovery of the fraud, received dividends, and otherwise 

 dealt with the property, he could not treat the contract as 

 void, and sue for money had and received ; but, though he 

 could not rescind the contract, inasmuch as such rescission 

 would work injustice, yet he might bring an action on the 

 deceit, and recover his real damages (q). 



But if after discovering the fraud he continue to deal 

 with the article as his own, he cannot recover back the 

 money from the seller (r). And the right to repudiate the 

 contract is not afterwards revived by the discovery of 

 another incident in the fraud (r). 



A sale of goods effected by the fraud of the buyer is not 

 absolutely void, but the seller may elect to treat it as a 



{I) Ward V. Hobbs, 4 App. Cas. at 

 p. 21, per Lord Cairns, L.C. 



()») Murray v. Mann, 2 Ex. 541 ; 

 Vrquhart'^. Macpherson, 3 App. Cas. 

 831 ; Story on Sales, 126. 



(«) Dawes T. Harness, L. R., 10 

 C. P. 166; 44 L. J., C. P. 194; 

 Chugh T. London and North Western 

 Mail. Co., L. E., 7 Ex. 26, 34; 41 



Contract made 

 voidable by 

 fraud. 



Where fraud 

 is practised 

 upon the 

 buyer. 



Except where 

 it works in- 

 justice. 



L. J., Ex. 17 ; 25 L. T., N. S. 708. 



(o) Murray v. Mann, 2 Ex. 541. 



{])) See Broom's Maxims, 4th ed. 

 293 ; and per Blackburn, J., R. v. 

 Saddkrs Co., 32 L. J., Q. B. 343. 



{q) Clarke v. Dickson, 27 L. J., 

 Q. B. 223. 



(r) Campbell Y. Fleming, 1 A. & E. 

 40. 



Where he 

 continues to 

 deal with the 

 article. 



Where fraud 

 is practised 

 upon the 

 seller. 



