What is the effect of procurement under false pretenses in contract law?

The implication of procurement under false pretenses in contract law directly relates to the concept of fraud. When a party enters into a contract based on false representations or deceptive practices, that party has been induced to agree to the contract under misleading circumstances. As such, the courts recognize the fraudulent act as sufficient grounds for the affected party to void the contract, making it voidable at their discretion.

This means that the deceived party has the option to either affirm the contract and proceed with it or to rescind it due to the fraudulent nature of its procurement. The ability to void the contract serves as a legal remedy to protect parties from harm when entering into contractual agreements based on untruthful assertions. Thus, the effective impact of procurement under false pretenses leads to the conclusion that the contract is voidable due to the fraud involved in its formation.

Other options suggest that the contract remains valid or only affects damages, which does not hold under the principle that fraud undermines the very basis of mutual consent necessary for contract formation. Therefore, procurement under false pretenses invalidates the legitimacy of the contract itself, granting the deceived party recourse to void it.