Given: \( \angle BAC = 90^\circ \) since \( BC \) is the diameter of the circle.
Let the lengths of the sides \( AB \) and \( AC \) be \( a \) cm and \( b \) cm respectively.
As \( \angle BAC = 90^\circ \), triangle \( ABC \) is a right-angled triangle. By the Pythagoras Theorem:
\[ BC = \sqrt{a^2 + b^2} \]
Since \( BC \) is the diameter of the circle, its length is \( 2r \), where \( r \) is the radius. Thus,
\[ 2r = \sqrt{a^2 + b^2} \Rightarrow 4r^2 = a^2 + b^2 \]
The area of triangle \( ABC \) is calculated as:
\[ \text{Area} = \frac{1}{2} \times a \times b \]
Multiply and divide this expression by \( a^2 + b^2 \):
\[ \text{Area} = \frac{ab}{2(a^2 + b^2)} \times (a^2 + b^2) \]
Substitute \( a^2 + b^2 = 4r^2 \):
\[ = \frac{ab}{2(a^2 + b^2)} \times 4r^2 = \frac{ab}{(a^2 + b^2)} \times 2r^2 \]
Therefore, the area is:
\[ \text{Area} = \frac{2abr^2}{a^2 + b^2} \]
The correct option is (A): \( \boxed{\frac{2abr^2}{a^2 + b^2}} \)