Caveat Emptor is a Latin phrase which means that Let the Buyer be Aware. It means that the responsibility lies on the buyer of goods and he must perform due diligence before the purchase of the goods.
A seller makes him goods available in the open market. The Buyer previews all his options and then accordingly makes his choice.
It is expected from the buyer to be alert in a contract of sale. He cannot hold the seller responsible for inferior goods unless the contact is based on fraud.
- This doctrine says that the seller will not be responsible. The buyer himself is responsible for the choice he made.
- The doctrine attempts to make the buyer more conscious of his choice.
- It is the duty of the buyer to check the quality and the usefulness of the product he has produced.
- If the product turns out too be defective or does not line up its potential the seller will not be responsible for this.
Example:- A bought a horse from B. A wanted to enter the horse in a race. It turns out that the horse was not capable of running a race on account of being lame. But A did not inform B his intentions. So, B will not be responsible for the defects of the horse. The Doctrine of Caveat Emptor applies.
Though the responsibility lies with the buyer, he can shift it to the seller under the given conditions:
- If the buyer has informed the seller about the purpose of the purchase, before making the purchase.
- If the buyer relies on the technical expertise and experience of the seller.
- If the goods are of a description that the seller supplies in his normal course of business.
SECTION 16. Implied conditions as to quality or fitness.—
Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:—
(1)Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose:
Provided that, 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 as to its fitness for any particular purpose.
(2)Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality:
Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.
(3)An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.
(4)An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.
EXCEPTIONS OF DOCTRINE OF CAVEAT EMPTOR
- Fitness of the Product for the Buyer’s Purpose :- If the buyer informs the seller about his purpose behind purchasing the goods and the seller does not sell the goods according to that knowingly, it relieves the buyer from the responsibility.
- Goods Sold by Description :- If the buyer purchases the goods based on their description which matches the product, then the seller cannot be held liable. The seller will be held liable only if he provides an incorrect description of the goods.
- Merchantable Quality of Goods :- section 16(2) states that the buyer purchases the goods from a seller based on a description and the seller deals in the goods of that description, then the goods must be of merchantable quality, i.e., capable of being passing the standards according to the market. If the goods are not of marketable quality then buyer will not be liable.
- Sale by Sample Inspection :- The Doctrine of Caveat Emptor does not apply if the buyer purchases the goods after careful inspection of a sample of the goods that he intends to buy and the seller supplies goods different from that sample. If the sale is made based on a description as well as a sample and the goods do not match both, then the buyer is not held responsible.
- Trade Usage :- The rule of Caveat Emptor does not apply if the seller deviates from informing the buyer about the quality or the fitness of goods/products. There is an implied condition or warranty on the condition of the goods.
- Fraudulent Representation by the Seller :- If the seller provides fraudulent information about the goods or conceals some important information about them, the buyer is not responsible.
BUYER MUST ASK THESE QUESTIONS BEFORE BUYING ANY PRODUCT?
- Who created the advertisement and product?
- What is their central goal?
- Why should I buy this product?
- Does this will benefit me?
- How does this affect us?
RELEVANT CASE LAWS
Jones v. Just (1868) 3 Q.B. 197
Facts: A firm of merchants contracted to buy from another some bales of Manila Hemp. This was to arrive from Singapore. The hemp arrived wetted with sea water. It was so damaged that it was not possible to sell it as Manila hemp in the market.
Issue: Whether the doctrine of caveat emptor shall apply where there is no inspection by the buyer and the goods are not in merchantable condition and thereof is plaintiff entitled to claim damages?
Judgement: Court observed that it must be taken as established that, on the sale of goods by a manufacturer or dealer to be applied to a particular purpose. it is a term in the contract that they shall reasonably answer that purpose, and that on the sale of an article by a manufacturer to a vendee who has not had the opportunity of inspecting it during the manufacturer than it shall be reasonably fit for use, or shall be merchantable, as the case may be.
There has, therefore, never been any doubt that the buyer is entitled to have an article at all events answering the description, even if he has been able to inspect it, and is not bound to accept it or having accepted it, may claim damages, if it does not. In general, on the sale of goods by a particular description, whether the vendee is able to inspect them or not, it is an implied term of the contract.
Where the buyer examines the goods and the defects are such which can be revealed by ordinary examination, the condition of merchantability does not apply to the extent of such defects. Where the product has some latent defects which cannot be revealed by ordinary examination, the condition of merchantability would apply when even if the buyer has examined the goods.
The court held that the hemp was not of merchantable quality and it was entitled to be rejected.
Richard Thorold Grant v. Australian Knitting Mills, Ltd. AIR 1936 PC 34
Facts: The appellant in the case is a fully qualified medical professional practicing in Adelaide, South Australia. He brought his legal action against the respondents/defendants, claiming damages on the ground, that he had contracted dermatitis by reason of the improper condition of underwear purchased by him from the respondents. He asserted that this presence was a consequence of negligence in the manufacturing process.
Furthermore, the appellant contended that the respondents, John Martin & Co., Ltd. and manufacturer Australian Knitting Mills violated the relevant implied conditions outlined in the SOGA.
Issue: Whether there is breach of implied warranty or condition?
Judgement: The court said that damage suffered was attributed to the negligent or improper way in which the manufacturers made the garments. The court considered the relationship between the manufacturers, retailers, and the appellant (the person suffering harm). It argued that there might not be a direct duty owed by the manufacturer to the appellant, given that the manufacturer sold the garments to the retailer however, appellant received the defective good from that retailer only. Court said that the disease contracted and the damage suffered by the appellant were caused by the defective condition of the garments which the retailers sold to him and which the manufacturers made and put forth for retail and indiscriminate sale.
The court held that retailers were liable for a breach of implied warranty or condition under Section 14 of the Sale of Goods Act, 1895 of South Australia. Appeal allowed.
PRESENT CASE
Q. 6/2022. (i) Pressure Cooker purchased used to be on gas stove but their is defect in the cooker which makes it burst. The seller is liable for selling defective goods as there was a breach of the implied condition of fitness for purpose.
(ii) Selling an acrylic shawl as a Pashmina shawl constitutes misrepresentation and fraud. The seller is liable for breach of the condition as to correspondence with description and is also responsible for misrepresentation.
(iii) It is implied that innerwear, being clothing, should be safe for human use. The allergic reaction indicates the goods were unfit for their intended purpose. The seller is liable for breach of the implied conditions of merchantable quality and fitness for use.
(iv) The seller must have the right to sell the goods. If the seller sells stolen goods, he breaches this implied condition. The seller is liable for breach of the implied condition as to title.
Q. 6/2020. (i) Their is a breach of implied condition as to fitness and hence A can recover damages (Priest vs Last).
(ii) Seller can be held liable because chocolate, by its description, sufficiently conveyed the purpose and it was clearly unfit for human consumption. Therefore, breach of condition as fitness of goods has occurred and buyer is entitled to damage.
(iii) A is entitled to reject the goods since seller committed breach of condition.
(iv) The seller was liable for violation of condition as to description and the buyer (A) is entitled to reject the saree.
(v) A can claim damages for nay loss caused to him by reason of the sellers failure to provide the buyer (A) a safe and secure title.
Q. 6/2019. X has asked the seller to sell him a particular brand of innerwear, therefore, the proviso would apply and the implied condition of innerwear’s fitness would not arise. There is no breach of implied condition or warranty by Y.
Q. 6a/2018. Bhim is bound by doctrine of caveat emptor. Amit is not liable for not correcting the impression Bhim had in his mind, i.e., Amit was not under the duty to correct the impression. Further, Bhim did not specify the type of silk he wanted to purchase.
