Final answer:
Fraud can be raised as a defense in contracts when one party intentionally deceives another, leading to a contract being entered into under false pretenses.
Step-by-step explanation:
In contract law, the defense of fraud can be raised in certain situations where one party has intentionally deceived the other, leading to a contract being entered into under false pretenses. Fraud occurs when one party makes a false representation of fact, with the intention of inducing the other party to enter into a contract. This defense can be raised if the deceived party can prove that they relied on the false representation and suffered harm as a result.
For example, if a person sells a car and claims that it has never been in an accident, when in reality it has, the buyer may have a defense of fraud if they can prove that the seller knowingly made a false representation to induce them into buying the car.
It is important to note that the defense of fraud must be raised within a certain time frame, as there are statutes of limitations that limit the timeframe in which a party can bring a legal action based on fraud.