What is true about a contract entered into under fraud?

When a contract is entered into under conditions of fraud, it is characterized as voidable by the injured party. This means that the party who has been misled or deceived has the right to choose whether to affirm the contract or to rescind it. If they decide to rescind, the contract is essentially treated as though it never existed, and they can seek remedies for any damages incurred as a result of the fraudulent misrepresentation.

The principle behind this is that the party who was defrauded did not enter the contract voluntarily, as they were misled about critical information that influenced their decision to engage in the agreement. Thus, they are afforded protective rights under the law to remove themselves from the obligations of the contract.

The options regarding automatic voidance or the necessity for ratification by a higher authority do not hold in this context. A contract affected by fraud is not automatically void; it remains valid until the defrauded party actively chooses to void it. Similarly, there's no requirement for a higher authority to approve or ratify a contract in such circumstances.