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CAVEAT EMPTOR

Sandeep Reddy 128 Shivangi Sharan 137 Shubham Khandelwal 143 Suresh Raveendran 155 Tessy Sunny 162 Tinu Kalra 165

CAVEAT EMPTOR
A Latin phrase for "let the buyer beware." Proclaims that the buyer must perform their due diligence when purchasing an item or service. A case on this point is Ward Vs Hobbs. In this case a contract of sale gets formed between A and B according to the terms of which A has to sell an animal from his farm to B. Negligently B selects an animal which has been suffering from some sickness. That sickness is characterized by propagation from one animal to the other and the ultimate effect is death of the animal. It should be noted that the sickness is externally visible. B, negligently selects such animal and as a result all animals present in B`s farm dies. B sues A. Court decides that B is negligent and he cannot blame the seller (A) for his own negligence and therefore B cannot claim any compensation.

Exceptions to Caveat Emptor

By Description
When the seller makes a mis-representation and the buyer relies on it, the doctrine of caveat emptor does not apply. A case on this point is Vorley Vs Whipp.
In this case, there is a sale between A and B according to which A has to sell his harvester to B. While selling A gives a lot of description about the machine. There after B comes to know that the delivered machine is not in accordance with given description. B Sues for repudiation of contract of sale.

Fraud
When the seller makes a false representation amounting to fraud and the seller actively conceals it such that the faults in the goods cannot be discovered on the reasonable examination, the doctrine of caveat emptor does not apply. A case on this point is Smith Vs Green. In this case a contract of sale gets formed between A and B according to which A has to sell an animal to B out of his (A`s) farm. B selects an animal after confirming that the animal is healthy. A had however concealed the fact that the animal was sick. The animal died and the court decided that B is to be compensated.

Fitness for Buyers Purpose [S.16(1)]


Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which goods are required, so as to show that the buyer relies on the sellers skill or

judgment and the goods are of a description which it is in the


course of the sellers business to supply, there is an implied condition that the goods shall be reasonably fit for such a purpose.

Condition as to Merchantability
Section 16(2)- Where goods are brought by description from seller who deals in goods of that description whether he is not the producer or manufacturer or not, there is an implied condition that the goods shall be of merchantable quality. The above provision reveals that the condition of merchantability is applicable when, The goods are sold by description. The dealer deals with such goods.

Examples
In Jones v. Just, 1868LR 3 QB 197, B&Co a firm of merchants contracted to buy from X some bales of Manila Hemp. This was to arrive from Singapore. The hemp arrived wetted with sea water. It was so damaged that it was not possible to sell it as Manila hemp in the market. The court held that the hemp was not of merchantable quality and it was entitled to be rejected. But where the buyer examines the goods and the defects are such which can be revealed by ordinary examination, the condition of merchantability does not apply to the extent of such defects. Where the product has some latent defects which cannot be revealed by ordinary examination, the condition of merchantability would apply when even if the buyer has examined the goods.

Examples
In Thornet v. Beers, (1919) 1 KB 486, B wanted to purchase some glue. The glue was stored in the sellers warehouse in barrels. B was given every facility to open the barrels and inspect them but B did not open the barrels. Liter on the glue was found to have defects which B could have noted if he had opened the Barrels. The court held that there is no breach of implied condition as to merchantability in this case and B was not entitled to any relief.`

Sale by Sample
A contract of sale by sample is a contract for sale by sample where there is a term express or implied in the contract, to that effect. (Section 17).In the case of contract of sale by sample, there is an implied condition 1.That the bulk shall correspond to the sample in quality. 2.That the buyer shall have a reasonable opportunity of comparing the bulk with the sample. 3.That the goods shall be free from any defect, rendering them unmerchantable.The defect should not however be apparent on a reasonable examination of the sample.

Examples
In Mody v. Gregson, L.R.4E.X.49, in a contract for the sale of brandy, by sample brandy colored with a dye was supplied. The court held that the buyer was not bound to the contract even though the goods supplied were equal to the sample. As the defects were not apparent on the reasonable examination of the sample. In E&SRuben Ltd v.Fair Bros, 1949 1K.B.254, A agreed to buy some rubber material from B. The sample of the rubber was shown to A .On receiving the rubber material, A found that the measurement of the rubber material was different from that of the sample. The court held that measurement of the rubber material was part of its quality. It was held that the goods did not correspond to the sample.

Examples
In Lorymer V. Smith, (1822) 1 B&C1., Two parcels of wheat were sold by sample. The buyer went to examine the wheat a week later. One parcel was shown to him but the seller refused to show the other parcel as it was not there. In this case the buyer was not given reasonable opportunity to test the bulk with the sample. The court held that the buyer was entitled to reject the contract of sale.

Purchase by sample and by description


Where goods are bought by sample as well as by description and the bulk of goods do not correspond with the sample or with the description, the buyer is entitled to reject the goods. The rule of caveat emptor shall not apply in such a case. Section
15.

Nichol V Godts (1854) 10 EX 191, the plaintiff agreed to sell some oil described as foreign refined rape oil, warranted only equal to sample. The oil supplied, though corresponded with the sample, was adulterated with hemp oil. It was held that since the oil supplied was not in accordance with the description, the buyer was entitled to reject the same.

Usage of Trade
Where the usage or trade annexes an implied condition or warranty as to quality or fitness for a particular purpose and seller deviates from that, then this rule does not apply. Section 16(3)
Trade usage is a term used in contract law to interpret ambiguous terms according to common business practices the parties should reasonably be able to rely upon.

Mr. C., landlord, contracts with ABC painters, based upon a bid they submitted to paint a 100 unit apartment complex. A dispute arises as to whether ABC has agreed to paint the common areas or just the apartment interiors. Because the contract is unclear and doesn't specifically refer to common areas, a court may look to trade usage to determine whether it is standard practice in the painting business to include common areas in such bids. If the court determines that painters typically include common areas when quoting prices for apartment complex painting, they will hold ABC liable for painting the common areas because it was reasonable for Mr. C. to rely on this trade usage and expect the common areas to be included in the price.