Mere silence amounts to fraud when the person keeping silent, is under a duty to speak. The duty to speak arises, where one party reposes trust and confidence in the other. Circumstances where it is the duty of the person keeping silence to speak are:- 1. In contracts of uberimae-fide (contract of utmost faith) 2. In contracts of fiduciary relations. 3. Contract of guarantee.
4. Customary contract.
2. Where silence is equivalent to speech:
Sometimes, the silence is equivalent to speech.
In such cases, the silence of a person amounts to fraud e.g., where a person keeps silent, knowing that his silence is going to be deceptive, he is guilty of fraud.
3. Half truths:
The silence may amount to fraud when a person discloses only the half truth and then keeps silent. A person may become guilty of fraud by non-disclosure also if he voluntarily discloses something and then stops half the ways. A person may keep silent. But if he speaks, he is duly bound to disclose the whole truth.