1. In fraud party makes a false statement with intention to deceive other party while in misrepresentation mollified intention to deceive other party is not there.

2. In fraud false statement is made by the party who knows that it is false while under misrepre­sentation statement in itself is false but the person asserting it believes it to be true.

3. When there is a misrepresentation by one party but the other party has means to discover the truth with ordinary diligences then contract cannot be avoided, however in case of fraud except in cases of fraudulent silence, party at guilt cannot take the defence that other party could have discov­ered the truth with ordinary diligence contract can validly be avoided by the aggrieved party.