Sale of Goods Act, 1930
Q. Explain the term ‘Caveat Emptor’.
What are the exceptions to this rule?
- The term ‘Caveat Emptor’ means ‘Let the buyer beware’ i.e. in sale
of goods, the seller is under no duty to reveal unflattering truths about the
goods sold. Therefore, when a buyer buys some goods, he must examine them
thoroughly. If the goods turn out to be defective or do not suit his purpose,
or if he depends upon his own skill and judgment and makes a bad selection, he
cannot blame anybody excepting himself.
For e.g. H bought
oats from S a sample of which had been shown to H. H erroneously thought that
the oats were old. However the oats were new. Held, H could not avoid the
contract. (Smith vs. Huges)
doctrine of Caveat Emptor has certain important exceptions as under –
for buyer’s purpose – Where the buyer, expressly or by implication makes
known to the seller the particular purpose for which he needs the goods and
depends upon the skill and judgement of the seller whose business it is to
supply goods of that description, there is an implied condition that the goods
are reasonable fit for that purpose. [Section 16(1)]. For e.g. an order
was placed for some Lorries to be used "for heavy traffic in a hilly area”. The
Lorries supplied were unfit and broke down. Held, there is a
breach of condition as to fitness.
under a patent or trade name – In the case of a contract for the sale of a
specified article under its patent or other trade name, there is no implied
condition that the goods shall be reasonably fit for any particular purpose.
quality - Where goods are bought by description from a seller who deals in
goods of that description, here is an implied condition that the goods are of
merchantable quality. But if the buyer has examined the goods, there is no
implied condition as regard defect which such examination ought to have
revealed. [Section 16(2)]
of trade – An implied warranty or condition as regards quality or fitness
for a particular purpose may be annexed by the usage of trade. [Section
by fraud – Where the consent of the buyer, in a contract of sale, is
obtained by the seller by fraud or where the seller knowing conceals a defect
which could not be discovered on a reasonable examination, the doctrine of
Caveat Emptor does not apply.