1.

INTRODUCTION

Caveat emptor means let the buyer beware. According to this principle it
is the duty of the buyer to be careful while purchasing goods of his requirement.
The buyer must examine the goods thoroughly. He should also see that the goods
are suitable for his purpose. If the goods prove to be defective or do not suit for
purpose, the buyer cannot hold the seller liable for the same. If the buyer, at the
time of making the purchase, depends upon his own skill and makes a bad choice,
he must blame himself for his own folly.

2. STATUTORY DEFINITION
According to section 16(a) the seller is under obligation to inform the buyer of
any defect, in the goods sold at the time of contract, except, in a case where the
defect is obviously known to the buyer. It means that if the defects are in the
knowledge of seller he must inform to the buyer about those defects provided
those defects are not obvious. But if the defects are obvious, the seller is not
bound to inform to the buyer.

Example, A purchases a horse from B, A needs the house for keeping but he does
not mention to B. The horse is not suitable for riding. A cannot reject the horse.

3. EXCEPTION TO GENERAL RULE

The doctrine of Caveat Emptor is subject to the following exceptions:

1. Purchase by Description. Where the goods are purchased by description, the

doctrine of caveat emptor does not apply if they do not correspond with the
description. (Section 15).

2. Purchase by samples and description. Where the goods are bought by

sample as well as by description and the bulk of the goods do not correspond
both with the sample or with the description, the buyer is entitled to reject the
goods. (Section 15).

Example A sells Air Filter to B saying that it is fit for corolla and genuine. B
finds that it is fit but not genuine. B can reject it.
3. Fitness for purpose. Where the buyer informs the seller about particular
purpose for which he needs the goods and relies upon seller’s skill and
judgment. The seller must supply the goods which shall be fit for the buyer’s
purpose. (Section 16(1)).

Example. A purchased two knitwear’s from B, a manufacturer. On wearing it.

A became ill. His illness was caused by chemical irritant which B failed to
remove in the process of manufacturing. B was held responsible.

4. Merchantable quality. Where the 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 or merchantable quality. But if the buyer has examined the
goods, there is no implied condition as regards defects which such
examination ought to have revealed (Section 16(2)).

Example. A brought a milk, from B, a dairyman. It was contaminated by the

germs of fever. A’s wife was infected and deed of it. B was held liable in
damages.

5. Usage of trade. Where the trade usage attaches an implied condition or

warranty as to quality of fitness and the seller deviates from that the principle
of Caveat Emptor does not apply (Section 16(3)).

Example. A purchase a hot water bottle from B, a retail chemist. While A’s
wife used the bottle, it burst and injured her. The use of bottle was known to
B. B was liable for beach. (Priest vs Last).

6. Purchase by sample. Where the goods are bought by sample, the principle of
Caveat Emptor does not apply. I the bulk does not correspond with the sample
or if the buyer is not provided an opportunity to compare the goods with
sample (Section 17).

Example. A buys sheep wool from B by showing a sample. The sheep wool
does not correspond with a sample. A can return it.
 7. Consent by fraud. Where the seller makes a wrong statement intentionally to
the buyer and the buyer relies on it or where the seller activity conceals the
defects in the goods, which could not be discovered on a reasonable
examination, this principle does not apply. (Section 17 of The Contract Act).

Example. A knows that his cupboard is made with wood not of high quality.
In order to sell his cupboard. A tells B that it is made with “Deer” wood. B
buys the cupboard. B can reject the contract.

8. Consent by Misrepresentation. Where the seller makes a misrepresentation

and the buyer relies on it, the doctrine of caveat emptor does not apply. Such a
contract is voidable at the option of the buyer. The buyer can reject the
contract.

4. CONCLUSION

That we conclude from above discussion that it is the duty of buyer to be aware
while buying goods and if he is not vigilant while buying or purchasing goods he
can afterwards cannot blame seller and cannot claim damages.

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 Transfer of property in goods

1. INTRODUCTION
The contract of sale of goods requires that on completion of contract the ownership in
goods must be passed from seller to buyer and this is commonly known as transfer of
property in goods

2. RELEVANT PROVISION
Section 18---24

3. ESSENTIAL OF SALE OF GOODS

(i) Two parties.

(ii) Price.
(iii) Goods.
(iv) Saleable property.
(v) Other essential of contract.

4. RULES REGARDING TRANSFER OF PROPERTY

(i) Transfer of property in specific goods.

(ii) Transfer of property in unascertained goods.
(iii) Unascertained Goods. The unascertained is the process by which the goods,
are identified and separated. Where there is a contract for the sale of
unascertained goods no property in goods is transferred to the buyer until the
goods are ascertained. (Section 18).

Example. A agrees to sell 50 kg of sugar out of sugar lying in a godown. B

becomes the owner when 50 kg sugar will be separated the rest.
(iv) Intention of parties. In contract of sale of specific or ascertained goods, the
ownership transfers when the parties intend to transfer it. It depends on the
terms of contract. It may transfer at the time of the contract or when the goods
are delivered or when the goods are delivered or when the payment is made.
(Section 19).

Example. A sells 100 bags of cement to B on cash basis. B becomes the

owner when he makes the payment.

(v) Specific goods is deliverable state. Where there is an unconditional contract

for the sale of specific goods in a deliverable state, the property in the goods
passes to the time of payment of the price or the time of delivery of goods or
both is postponed. (Section 20).

(vi) Goods to be put into a deliverable state. Where there is a contract for the
sale of specific goods and the seller is bound to do something to the goods for
the purpose of putting them into a deliverable state, the property does not pass
until such thing is done and the buyer has notice thereof. (Section 22).

(vii) Goods to be measured, tested etc. Where there is a contract for the sale of
specific goods in a deliverable state, but the seller is bound to weigh, measure,
test or do some other act or thing with reference to the goods for the purpose
of ascertaining the price, the property does not pass until such act is done and
the buyer has notice thereof. (Section 22).

Illustration. A, the owner of a stock of bank, contracts to sell it B, weight and

deliver it, at Rs. 100 per ton. B agrees to take and pay for it an a certain day,
part is weighted and delivered to B. The ownership of residue is not
transferred to B until it has been weighed pursuant to the contract and notice
thereof is given to B.

(viii) Unconditional appropriation. Where there is a contract for the sale of

unascertained or future goods by description, the property in the goods passes
to the buyer when goods of that description in deliverable state are
unconditionally appropriated to the contract, either by the seller with the
 assent of the buyer or by the buyer with the assent of the seller. (Section
23(1)).

Example. T bought 20 bags of sugar from R. R filled 20 bags. T took delivery

of 4 and promised to take the rest. T failed to collect the remaining and R sued
for price. Held, the ownership had passed to the buyer. (Rhods vs. Thwaits).

(ix) Delivery to a carrier. The seller is deemed to have appropriated the goods
when he delivers the goods to a carrier for transmission to the buyer. The
delivery of goods to a carrier is considered the delivery to the buyer and the
property at once transfers to the buyer. The term appropriation involves
separating, weighing, measuring, counting or similar acts. (Section 23 (2)).

Example. B buys a fridge from A, a shopkeeper. When A handovers the

fridge to carrier, the ownership transfers to B.

(x) Goods delivered on approval. When goods are delivered to the buyer on
approval or on sale or on sale or return of other similar terms, the property
therein passes to the buyer:

(i) When he gives his acceptance to the seller or does any other act
adopting the transaction.
(ii) If he does not give his acceptance to the seller but retains the goods
without giving notice of rejection beyond the time fixed for the return
of goods, or if no time has been fixed, beyond a reasonable time.
(Section 24).

Example.

A Sends jewellery to B on sale or return. The Jewellery becomes B’s

property when B retains them.

5. CONCLUSION

Thus we conclude from above discussion that transfer of property is the most
essential part of sales of goods. It is necessary because is case of loss to goods it
can be easily determine as to who has to bear the loss.
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.
Sale by non owner

1. INTRODUCTION

The general role is that only the owner of the goods can sell the goods. If the seller is not
the owner of the goods, the buyer cannot become the true owner of those goods even
though he has paid value for the goods. This protests the owner of the goods. The maxim
‘nemo dat quoted non habet’ means that no one can transfer a better title that he himself
processes.

Example. A sells car to which he is not owner to B who buys it for value and
without notice that A, is not the owner. The true owner can recover it from B.

2. EXCEPTIONS TO THE GENERAL RULE

(i) Sale by a mercantile agent (Section 27).

(ii) Sale by one of joint owner (Section 28)
(iii) Sale by a person in possession under a voidable contract. (Section 29).
(iv) Sale by one who has already sold the goods but continues in possession
thereof (Section 30 (1)).
(v) Sale by buyer obtaining possession before the property in goods have
vested in him (Section 30(2)).

All these exceptions are necessary for the protection of persons who deal confide
with mercantile agent and others mentioned in exceptions.

3. EXPLANATION OF EXCEPTIONS TO THE GENERAL RULE

The following are the cases under which a non-owner of goods can sell the goods and the
buyer become the true owner of those goods.

1. Person and the owner. Where the owner of the goods by his words or
conduct, or act or omission, causes the buyer to deliver that the seller has the
 authority to sell them, he cannot afterwards deny the seller’s authority to sell.
The buyer in such a case gets a better title than the seller. (Section 27 clause
1)).

Example.

A sold his house in his presence to B. His father did not object. Later, he
cannot deny his son’s authority to sell. The sale is valid.

2. Sale by mercantile Agent. When a mercantile agent is, with the consent of
the owner, in possession of goods or documents of title to goods, any sale
made by him, in the ordinary course of business shall be valid provided the
buyer acts in good faith and without notice that the seller had no authority to
sell. (Provision to Section 27).

Illustration for a sale by mercantile agent is deemed to be valid.

(i) Possession must be with consent.

(ii) Sale must have been made when acting in the ordinary course of
business of a mercantile agent.

Illustration. A is a manufacturing jeweler. B is a person whose business it is

to travel about the contrary selling jewellery. A delivers certain articles of
jewellery to B upon the terms that they should remain the property of A until
sold or paid for B of pledges the jewllery with a pawn broker and money
lender. The pledge is valid B is a mercantile agent and as such has an sensible
authority to pledge the jewellery.

3. Joint owner. When one of the joint owners, who is in possession of the goods
by permission of his co-owner sells the goods, a by permission of his co-
owner sells the goods, a buyer will get a good title to the goods provided the
buyer buys them I good faith and without notice that the seller’s title was
defective at the time of contract. (Section 28).

Example. A, B and C are joint owner of firm authority to gives the A for
management of firm. Now A has valid authority to perform any further on
behalf of B and C.
4. Person in possession in voidable contract. When a person has obtained
possession of the goods under a voidable contract and sells them before the
contract has been cancelled, the buyer of such goods acquire a good title
provided the buyer acts in good faith an without notice of the seller’s defect of
title. (Section 29).

Example. A, by fraud buys a car from B, A sells the car to C before

cancellation of contract by B, C gets a good title.

5. Seller is possession with sale. When a person has sold goods but continues to
be in possession of them of the documents of title thereto, he may sell them to
a third person and if such person obtains delivery thereof in good faith and
without notice of the previous sale, he gets a good title to them although the
property in the goods has passed to the first buyer. (Section 30(1)).

Example. A sells cow to B, B leaves his cow with A, A fraudulently sells the
cow to C. C gets a good title to cow.

6. Buyer in possession before sale. Where the buyer obtains possession of the
goods before the property in such goods has passed to him with the consent of
the seller, he may sell, them to a third person and if such person obtains
delivery of the goods in good faith and without notice of any lien of the
original seller he will get a good title. (Section 30(2)).

Example. A agreed to buy a house if his advocate approved. A obtained

possession of a car and sold it to B. But the advocate disapproved. It was held
that the buyer has got a good title. (Marten vs Whale). (1917) 2 KB 480.\

7. Unpaid seller. Where an unpaid seller who has a right of lien or stoppage
seller who has a right of lien or stoppage in transit results the goods, the
buyer get a good title to the goods as against the original buyer in spite of the
fact that no notice of resale has been given to the original buyer. (Section
54(3)).

8. Finder of lost goods. A finder of the lost can also sell the goods under some
circumstance and the buyer will get a good title. (Section 169).
 9. Pledgee. A pledge can also sell the goods under some circumstances. The
buyer gets a goods title (Section 176).

Example. A pledges his house to B and borrows Rs. 15 Lac. A does not pay
the loan. B sells the house to C. C gets a good title.

10. Exceptions under other acts. A non-owner can transfer a better title in the
following cases also.

(a) In case of insolvency of individuals and companies, the official

receiver can convey a better title to the buyer.
(b) In case of negotiable instruments, the holder in due course gets
a better title than that of transferor.

Example.

A becomes insolvent. B, the official receiver of A sells some goods

of A to X X. X gets a good title to goods.

4. CONCULUSION

Thus we conclude from above discussion that law regards the sale which
is made by person other than the owner of unless is it made by persons
mention specifically in The Sale of Goods Act, 1930.

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