Fraud in the factum (fraud in the execution) occurs when the fraudulent misrepresentation prevents a party from knowing the character or essential terms of the transaction. What is the effect?

• A. No contract is formed, and the apparent contract is VOID.
• B. The contract is voidable.
• C. The contract is enforceable despite misrepresentation.
• D. The contract is partially void.

Answer: (A)

Fraud in the factum targets the very nature of the document being signed. When the misrepresentation is about what the document is—its character or essential terms—the signer has not understood or intended to enter into a contract at all. Because there was no genuine assent to the instrument, no contract is formed; the apparent contract is void from the start (void ab initio).

Think of it like signing a deed thinking it’s a simple receipt. The fraud prevented you from knowing you were signing a contract, so there’s no binding agreement to enforce. If the misrepresentation were about terms while you knew you were signing a contract, the result would typically be voidable, not void. The other options imply some continuing obligation or enforceability, which isn’t consistent with fraud that conceals the document’s nature.