Sales of Goods Act, 1930 - Caveat Emptor

CAVEAT EMPTOR is a Latin Phrase which means LET THE BUYER BEWARE. This means the buyer must satisfy himself that the goods which he is buying are of the quality which he requires and will suit his purpose. 

Though there are certain exceptions to the rule of Caveat Emptor. In these conditions contract becomes voidable at the option of the buyer.

Consent by Misrepresentation: When the seller makes a misrepresentation related to material facts of the goods and the buyer relies on such representation, the rule of 'Caveat Emptor' does not apply and the contract entered between the parties is be a voidable contract at the option of the buyer.

Consent by Fraud: If the seller actively conceals a defect in the goods in such a manner that on a reasonable inspection the defect could not be discovered, by the buyer and the buyer, relying upon such false representation, buys the goods from the seller, the resulting contract would be a voidable contract at the option of the buyer whose consent has been acquired by fraud. Here  the buyer's remedy is that he can void the contract and call also claim damages from the seller for fraud.

Fitness for buyer purpose: If the buyer informs the seller the purpose for which he is buying the goods, and the buyer relies on the seller's skill or judgment and the seller happens to be a person whose business is to sell goods of that description, then there is an implied condition that the goods shall be reasonably fit for such purpose. The rule of 'Caveat Emptor' will not apply in such cases.

Sale by sample: When the goods are sold by description and the goods supplied by the seller do not match to the description, doctrine of caveat emptor does not apply.

Sale by sample and description: When a sale by sample as well as by description and the bulk of the goods supplied do not correspond to the sample as well as with description, doctrine of caveat emptor does not apply.

Merchantable Quality: When there is sale by description where the goods are bought from a seller who deals in those goods there is an implied condition as to the goods being of a merchantable quality, i.e., goods should be capable of being used as such goods however if the buyer has examined the goods, there will be no implied condition as regards defects which such examination ought to have revealed, i.e., in such cases the rule of Caveat Emptor will be applicable.

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