Sale of Goods Act' 1930 Notes
Business Laws Notes B.Com 1st & 2nd Sem CBCS Pattern
‘Caveat Emptor’ and exceptions to this rule
Caveat Emptor Meaning
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.
The doctrine of Caveat Emptor has certain important exceptions as under:
1. Fitness
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.
2. Sale
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.
3.
Merchantable 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)]
4. Usage
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 16(3)]
5. Consent
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.
Also Read: The Sale of Goods Act, 1930 Important Questions
Q. Discuss Expressed and Implied conditions under Sale of Goods Act, 1930. 2012, 2014
Q. Distinguish between hire purchase and sale and agreement to sale.
Q. What do you mean by ‘caveat emptor’? Discuss the exceptions to this rule. 2019
Q. Define the term goods. What are the different types of goods? 2021
Q. Explain the rules relating to performance of contract of sale.
Q. Explain the provisions of Sale of Goods Act' 1930 relating ot transfer of ownership.
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