Doctrine of Caveat Emptors

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 Doctrine of Caveat Emptors

The maxim, Caveat Emptor means "Let the Buyer Beware". The Doctrine of Caveat Emptor states that when the Buyer was given a chance of examining the goods but he did not examine them, in fact relied on his own skill and judgement and makes a bad selection then he can not blame anybody except himself. In other words unless the buyer specifies his purpose for buying the goods, it is not the duty of the seller to give the buyer suitable goods required by him (buyer).

Exception to the rule

The law of Caveat Emptor has certain exceptions, where in the seller shall stand liable for losses suffered by the buyer.

1. Where the buyer makes the purpose known to Seller [IMPLIED CONDITION AS TO QUALITY OR FITNESS U/S 16(1)]

Where the buyer (expressly or impliedly) makes known to the seller the particular purpose for which the buyer requires the goods and relies on the skill and judgement of the seller, then it becomes the duty of the seller to provide the goods which are suitable for the buyer's purpose. 

(2) Merchantable quality [Implied Condition as to Merchantability U/S 16(2)]

Where:

(a) The goods are bought by description, and

(b) Seller deals in similar goods.

Then, there is an implied condition, that the goods should be of merchantable quality i.e. if there exists any defect in the goods, then seller shall be liable, but under few circumstances the seller shall stand liable.

(3) Sale of an article under a Patent or Trade Mark

Where the buyer demands a product of a specific patent or a trade marked product and does not rely on the judgement of the seller and subsequently suffers some loss, then the buyer can not hold the seller liable, but under few circumstances the seller shall stand liable. 


Examples:
A buyer asks a seller for an article which will fulfill some particular purpose. The seller in response sells an article with a well-known trade name. The buyer suffers loss subsequently, the seller is liable because although the product was sold under a trade name but buyer relied on judgement of seller.

(4) Consent By Fraud

Where the consent of the buyer was obtained by fraud by the seller, and the buyer suffers any loss then the seller shall be liable.

(5) Usage of Trade

An implied condition as to quality or fitness for a particular purpose may be annexed by usage of trade.

(6) Where the seller conceals a latent defect

A latent defect is a defect which can not be revealed with ordinary examination of the goods. Where a seller concealed a latent defect of the goods while selling goods to the buyer and the buyer subsequently suffered loss due to that latent defect, then in such situations, the rule of CAVEAT EMPTOR does not apply. Therefore the seller is held liable for the latent defects.

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