Fraud1 renders a contract voidable at the option of the party defrauded. On discovery of the fraud the buyer may either return the animal and claim for return of the price paid2, or keep the animal and claim damages. This is so even where the fraud concerns something outside an express warranty; thus proof of fraud at the time of the sale, for example, as to a horse's age, would vitiate the sale although the warranty was only as to soundness and freedom from vice
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This Practice Note examines:•why negative pledge clauses are used in commercial transactions •the consequences of breaching negative pledge provisions•how negative pledges are viewed in the context of security and quasi-security, and•key considerations when drafting a negative pledge clauseWhere
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