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CAVEAT EMPTOR


BY-CH.SATHVIKA

(GITAM SCHOOL OF LAW)

ABSTRACT:

The term caveat emptor means “let the buyer beware” it is one of the rule applying to a buyer who is bound by actual as well as constructive knowledge of any fault in the thing he purchased, this rule is used with reference of sale or sales of the properties where the purchaser is expected to exercise proper caution and to inform himself as to its quality and obstructions. The philosophy behind the rule caveat emptor was basically reliance placed by the buyer on his own skill judgement. It is based on the fundamental premise that once a buyer satisfies himself with respect to the suitability of product for his use, he would later have no right to decline the same.

CAVEAT EMPTOR

“Qui ignorance debuit qoud jus alienum emit: let the buyer beware “

The expression caveat emptor is a neo-Latin word it usually finds a place in business laws. The word caveat emptor means “let the buyer beware” it helps to avoid the risk from seller. The enactment of English sales of goods act, 1893 and later modified by English sale of goods act, 1979 the exceptions to the rule of caveat emptor have become more prominent than the rule itself. The doctrine of caveat emptor is set out in section 16 of sales of goods act, 1930. The provisions corresponds to section 14 of the English act of 1893. The doctrine of caveat emptor is formed upon the fundamental principle that at one time a buyer is contented with the product’s suitability, then he has no such following right to lose such product. It means the buyer themselves is the responsibility for their choice.

DOCTRINE OF CAVEAT EMPTOR

It is exactly explained in section 16 of the act “there is no implicated warranty or conditions for any specific purpose of goods contributed under sales of goods act”. A vendor makes his goods obtainable in the open market. The buyer previews all his options and then accordingly makes his choice and purchase it. The doctrine of caveat emptor tells that the buyer himself is responsible for the choice he made.so the doctrine attempts to make the buyer more conscious of his choices. It is the duty of buyer to check the quality of the product he purchasing. If the product turns out to be defective then it does not lie up to its potential the seller will not be responsible for this. However the buyer shifts the responsibility to the seller if the condition are fulfilled they are

The buyer should make the seller aware of the particular purpose for which he is making purchase;

The buyer should make purchase on the basis of seller’s skill or judgment;

The products should be an example of what is to be offered by the seller's company.


SATEMENT OF CAVEAT EMPTOR

Under Section 16 of the Sale of Goods Act 1930 incorporates the principle of caveat emptor which reads as-“Subject to the provisions of this act or any other law for the time existence in power there is no implicated state or warranty as to quality or fitness for any provided purpose of goods supplied.” The principle of caveat emptor can be justified where there is disproportionate of power between the seller and the buyer. It shows the responsibility of the buyer before making a purchase. Ignorance of law has no justification," so a customer should be vigilant about the stuff the law allows him to remain that way.

EXCEPTIONS OF CAVEAT EMPTOR

There are eight exceptions to the rule of caveat emptor they are:-


1) Purchase by description: The rule of caveat emptor does not apply in a case where goods are brought by description from a seller in such situation there is an indirect circumstances that the goods shall communicate with the description. It is a condition which moves to the radicle of the contract, and the violation of it qualifies the buyers to failure the goods.


2) Goods purchased under brand name: When the buyer buys a product under a trade name or a branded product the seller cannot be held responsible for the usefulness or quality of the product. So there is no implied circumstance that the goods will be suitable for the cause the buyer intended.


3) Goods of merchantable quality: Section 16(2) of sales of goods act deals with the exception of merchantable quality. The section states that the seller who is selling goods by description has a duty to provide goods of merchantable quality, if the goods are not marketable quality then the buyer will not be responsible. However if the buyer had a reasonable chance to examine the product, then this exception will not apply. For example: The plaintiff had bought amounts of turkey feed from the defendant in Kendall v. Lillico & Sons Ltd. It contained a poisonous item, spores of an aspergillum flavus fungus that killed its flock. By 'marketable standard,' the products in the manner in which they were tendered are of no use keeping with the definition in which those products would normally be sold, and therefore not alleged to contract.


4) Fitness for purpose: Where the buyer informs the seller the particular purpose for which the goods are required and relies upon the seller’s skill or judgement there is in that case, an implied condition that the goods shall be reasonable fit for the purpose for which they are required.


5) Sale by sample: If the purchaser buys his goods after inspecting a representative then the rule of doctrine of caveat emptor will not apply. If the rest of the goods do not resemble the sample, the buyer cannot be held responsible the seller will be the responsible person.

For example: A places an order for 50 cello pens with B. He checks one sample where the pen is red. The rest of the pens turn out to be blue. Here the doctrine of caveat emptor will not apply and B will be responsible.

6) Fraud and misrepresentation by the seller: This is an important exception. If the seller acquire the agreement of the purchaser by fraud then caveat emptor will not apply. Also if the seller hides any material influence of the goods which are behind time find on closer examination then existence the purchaser will not be accountable. In both cases, the purchaser will be the guilty party.


7) Usage of trade: There is an implied condition or warranty about the standard or the suitability of goods/products. But if a purchaser diverged from this then the rules of caveat emptor end to apply. For example, A brought goods from B in a sale of the contents of a ship. But B did not inform A that the contents were sea damaged, and so the rules of the doctrine will not apply here.


Conditions implied by the trade usage: In sales of goods act Section 16(3) gives statutory force of conditions implied by the usage of a particular trade. It says: It says: "Trade utilization may enact an implied guarantee or conditions as to the quality or suitability for the particular motive. In a case of Peter Darlington Partners Ltd v Gosho Co Ltd[5], where a contract for the sale of canary seed was held subject to the custom of the trade that for adulteration in the seed, the purchaser would get a refund on the price, but would not failure the goods. However, an unreasonable custom will not, affect the parties in a contract.


8) Sale by description: If the sale is done via a sample as well as a description of the product, the buyer will not resemble the sample or the description. Then the authority will fall directly on the seller. Where the goods are brought by sample as well as the description and the bulk of goods do not correspond with the sample or with the description. The buyer is entitled to reject the goods .the rule of caveat emptor shall not apply in this case.

CASES ON CAVEAT EMPTOR


In Ward v. Hobbes (1878) 4 AC 13, those pigs were sold by auction “with all faults” the pigs were suffering from typhoid fever and one of them were died that the seller was not obliged to reveal that the pigs were unhealthy. The House of Lords held that a seller cannot be allowed to use artifice or mask to hide the defects in the product sold, as this amount to be fraud on the vendee; so far the doctrine of caveat emptor does not inflict duty on vendor to disclose each and every defect in the product. The caveat emptor inflicts such announcement on customer to use care and skill while purchasing such product.


In Wallis v. Russell (1902) 2 IR 585 the Court of Appeal clarified the caveat emptor framework. "Caveat emptor does not in law implicit that the purchaser must 'take a risk,' it means that he should 'take caution.' It refers to the purchasing of particular products, such as a horse or a photo, on which the buyer may, and typically does, exercise his own seller's judgment."


In Shital Kumar Saini v. Satvir Singh [1], the petitioner brought a compressor with one year guarantee. The fault materialized within three months. The petitioner requested for renewal. The seller replaced it but without on condition that any further warranty. The State Commission permitted it to be refused of expressing that there was an implied warranty guaranteed under Section 16 of the Sale of Goods Act, 1930 that the goods should be sensible fit for the purpose for which they are sold.

Conclusion:

The age old principle caveat emptor may now disappear in the favour of the new principle caveat venditor that is directed towards a new consumer protection system. The seller should have knowledge about all implied conditions and warranties and he would be liable for loss of goods which do not come up to the standard quality though he has taken all possible care. Finally the seller must disclose all the facts regarding product in order to avoid conflict.


Reference:

  • www.lawteacher.com

  • www.investopedia.com

  • www.lawoctopus.com

[DISCLAIMER: This article is for general information only. We have tried to include as much information as possible but there are chances that some important information may have been missed .It is NOT to be substituted for legal advice or taken as legal advice. The publishers of the this article shall not be liable for any act or omission based on this note].

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