Doctrine of Caveat Emptor

Caveat emptor a Latin word which means “let the buyer beware”. 

As per this principle, the buyer has to perform due diligence before making a purchase.

The buyer cannot blame or sue the seller for defective goods or service if buyer was careless at the time of purchase. It is buyer’s responsibility to check the goods at the time of purchase. Buyer purchases goods if he satisfied that goods are according to his requirement. The buyer has to bear the consequences of his wrong selection of goods.

Exceptions to the Doctrine of Caveat Emptor

The following are some of the exemptions to doctrine of Caveat Emptor:

1. Sale by Description:

When the buyer purchases the goods or service assumes that goods are of merchantable quality. Section 15 of the Sales of Goods Act, 1930, sale by description is contract for the sale of goods, it is implied condition that the goods shall correspond with the description. If the sale is by sample as well as by description, it is not sufficient that the bulk of the goods correspond with the sample if the goods do not also correspond with the description.

2. Purchase by Samples and Description:

If the buyer buys goods with sample and description and it does not match the description then buyer can reject the goods. Its expected goods match the sample and description.

3. Fitness for Purpose:

When the buyer informs the seller of his purpose of buying the goods, it is implied that he is relying on the seller’s judgment. It is the duty of the seller then to ensure the goods match their desired usage.

4. Misrepresentation:

Where the seller has made a false representation relating to the goods and the buyer has relied upon it, the doctrine of Caveat Emptor will not apply. Such a contract being voidable at the option of the innocent party, the buyer has a right to rescind the contract.

5. Goods of Merchantable Quality

Section 16 (2) deals with the exception of merchantable quality. The sections state that the seller who is selling goods by description has a duty of providing goods of merchantable quality, i.e. capable of passing the market standards.

So if the goods are not of marketable quality then the buyer will not be the one who is responsible. It will be the seller’s responsibility. However if the buyer has had a reasonable chance to examine the product, then this exception will not apply.

6.  Sale under a Patent or Trade name

In the case of a contract of sale of specified goods under its patent or trade name, there is an implied condition that the product is fairly fit for any specific purpose.