CAVEAT EMPTOR , IMPLIED CONDITIONS AND WARRANTIES

BY : Mohan Singh 144

CAVEAT EMPTOR
Caveat Emptor is a Latin phrase meaning "let the buyer beware. Let the buyer beware: the principle that the seller of a product cannot be held responsible for its quality unless it is guaranteed in a warranty. For example, you buy a used car which you are told is in perfect condition, but it immediately breaks down OR you buy a house, but it has termites. It merely summarizes the concept that a purchaser must examine, judge, and test a product considered for purchase himself or herself.

EXAMPLE
Suppose Ram bought 10 cows from a cattle broker. Out of those 10, 2 cows had defects. However, Ram did not know this because he didnt check all 10 cows though he paid for them. Guess what happened? The 2 infected cows died within three days of the purchase. Now, as there was no tacit condition that the cows would be in great health at the time of the sale. Ram cannot hold the cattle broker as responsible for having sold him those infected cows. It was Rams basic duty to check the health of those cows and not expect the cattle broker to state all the defects.

EXCEPTIONS OF CAVEAT EMPTOR

When there is a fraud by the seller.
When the buyer intimates the purpose for purchasing a product or item. Where the goods are bought by sample and if the Bulk does not correspond with the sample, or sample, or if there is any hidden or latent defect in the goods.

Where the buyer makes known to the seller the purpose for which he requires the goods and relies upon the sellers skill and judgment but the goods supplied are unfit for the specified purpose.

CONDITIONS AND WARRANTIES

Condition:
A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. [Sec 12(2)]

Warranty:
A warranty is a stipulation collateral to the main purpose of the contract, breach of which gives rise to a claim for damages, but not a right to reject the goods and treat the contract as repudiated. [Sec 12(3)]

CONDITIONS vs WARRANTIES

Two cases involving opera singers show the difference between conditions and warranties .

ANNA v ALTO THEATER CASE, Mrs. Anna was an opera singer.

She agreed to sing in an opera starting on 28 November. However, she became ill and was unable to sing until 4 December. The opera company had to hire another singer so that the opera could start on 28 November. They could only get another singer if they hired her for all the performances of the opera.

They did this and refused the services of Mrs Anna once she was better Mrs. Poussard raised a court action to try to make the company pay her.
However, the court said that Mrs. Anna breached a CONDITION of the contract when she was unable to perform on 28 November. This was a basic term of the contract.

BRAD vs ARIZONA OPERA CASE

BRAD was an opera singer . He agreed to sing in London in a number of theatres beginning on 30 March He also agree that he would arrive in London 6 days before the first performance in order to practice. BRAD became ill and did not arrive in London until 3 days before the first performance The opera company refused to allow him to sing They said he had breached the contract . However, the court said that the part of the agreement about practicing was a warranty not a term . That meant it was not a basic part of the contract. It was subsidiary part.

IMPLIED CONDITION (Secs. 14 to 17)

As to Description

As to Title

As to Sample

As to Quality or Fitness

As to Merchantability

As to Wholesomeness

IMPLIED WARRANTIES
Quiet Enjoyment Freedom from Encumbrance Dangerous Nature Usage of Trade

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