CAVEAT EMPTOR

By Jitesh Daga, 1140 Raghav Rathi, 1156.

What Is CAVEAT EMPTOR?

According to Section 16 of the Sales of Goods Act, 1930, Ceveat Emptor means no Implied Condition as to Quality and Fitness of the Goods.

Meaning

As a general rule, there is no implied condition or assurance given as to the quality or fitness of goods sold by the seller for any particular purpose. This principle underlines a contract of sale. It is known as CAVEAT EMPTOR, which means BUYER BEWARE.

Meaning (contd.)

The buyer must be aware of his requirements before entering into a contract of sale. He cannot repudiate the contract afterwards. However, this rule is subject to following exceptions stated in SECTION 16 of the act.

Impied condition of quality and fitness as an exception to CAVEAT EMPTOR

Fitness for buyers purpose

Section 16(1) : If the buyer explains the particular purpose for which he requires the goods, to the seller, and if it is in the course of sellers business to deal with such goods and if the buyer relies on the sellers skill to make a choice for him, then there is an implied condition that the goods shall be fit for the buyers purpose. However a contract taking place under a patent or other made name does not give such implied condition.

Merchantable quality
Section 16(2): In case of sale by description, if the seller deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality. Merchantable quality of goods means the goods should withstand ordinary handling and be fit for the purpose for which they are meant.

Usage of trade
Section 16(3): An implied warranty or condition as to quality or fitness of a particular purpose at times can be gathered from the custom or usage of trade. At times, certain goods are used by people for different purposes. In such cases, the goods shall be presumed to be fit for all purposes unless otherwise stated by the seller.

Usage of trade- Examples

Spirit sold in the market is presumed to be fit for both medical as well as household purposes, unless otherwise provided. Dead bodies of certain animals are used for preparing leather and also for human consumption. If they are unfit for any purpose then the seller must tell expressly about it.

Consent by Fraud
If the consent of the buyer is obtained by the seller by fraud, i.e., when the seller has knowingly concealed certain defects or made a fraudulent representation about quality, then the buyer can repudiate the contract.

Consent by Fraud-Example
If Shreyank, a computer seller tells Razan, a prospective customer, that a particular machine has an i5 processor(good quality), whereas the actual processor of the machine is an i3 processor(bad quality), then Razan even after signing into the contract, can repudiate the contract afterwards.

Condition to Wholesomeness
With respect to eatables, food products and provisions there is an implied condition that the goods shall be wholesome and fit for the purposes for which they are meant.

Express Agreement
At times, if the seller expressly assures about the quality of fitness of goods for a certain period then it is an express condition about the quality and fitness of goods.

Express Agreement-Example
If A, a seller assures B, a buyer that a food product has a minimum some specific amount of vitamins A and C, then this condition becomes an exception to caveat emptor and becomes an express agreement.

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