The Doctrine Caveat of Emptor and Exemption

 

The doctrine of "caveat emptor" is a Latin term that translates to "let the buyer beware." This principle places the onus on the buyer to perform due diligence before making a purchase. Under this doctrine, the buyer assumes the risk for any defects in the goods purchased, unless the seller has made specific warranties or representations about the goods.

Definition of Caveat Emptor

The doctrine of caveat emptor is encapsulated in Section 16 of the Sale of Goods Act, 1930, which states that 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 in certain circumstances.

Exemptions to Caveat Emptor

There are several exceptions to the doctrine of caveat emptor where the seller may be held liable for defects in the goods:

1.      Fitness for Purpose: If the buyer makes known to the seller the particular purpose for which the goods are required, and relies on the seller's skill or judgment, there is an implied condition that the goods shall be reasonably fit for such purpose (Section 16(1)).

2.      Merchantable Quality: When goods are bought by description from a seller who deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality (Section 16(2)).

3.      Sale by Sample: In a sale by sample, there is an implied condition that the bulk shall correspond with the sample in quality, and that the buyer shall have a reasonable opportunity to compare the bulk with the sample (Section 17).

4.      Sale by Description and Sample: When goods are sold by both description and sample, the bulk of the goods must correspond with both the description and the sample (Section 15).

Relevant Case Laws

1.      Ward v. Hobbs (1878): This case established that the seller is not liable for defects that the buyer could have discovered upon reasonable examination.

2.      Grant v. Australian Knitting Mills (1936): This case highlighted the exception to caveat emptor, where the buyer relied on the seller's skill and judgment for the purchase of goods for a specific purpose.

These sections and case laws provide a comprehensive understanding of the doctrine of caveat emptor and its exemptions.

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