Presented by:-

Divyanshu Soni

Section – A
MBA 1st Year
INTRODUCTION
 Caveat emptor is the Latin for ‘let the buyer
beware’. The must take care of his own interest
while purchasing the goods.
 Buyer in a contract of sale of specific goods will
purchase them a his own risk with regard to the
quality or fitness of the goods except in case of
fraud or where a condition to that effect is laid
down in the contract itself..
Example of caveat emptor
 A bought a horse from B. A wanted to enter
the horse in a race. Turns out the horse was
not capable of running a race on account of
being lame. But A did not inform B of his
intentions. So B will not be responsible for
the defects of the horse. The doctrine of
caveat emptor will apply.
EXCEPTIONS OF CAVEAT EMPTOR
 Purchase by description:-
The rule of caveat emptor does not apply in
case where goods are brought by description
from a seller.
 Example:-
A car is sold as a “New singer car”. The buyer find it
to be a used one. The buyer may reject the car and
claim damages.
Fitness 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 duty of the seller then to
ensure the goods match their desired usage.
 EXAMPLE:-
A goes to B to buy a bicycle. He informs B he wants
to use the cycle for mountain trekking. If B sells him
an ordinary bicycle that is incapable of fulfilling A’s
purpose the seller will be responsible.
 Conditions as to title :-
The general rule is that only the owner of goods can
transfer a good title. no one can give a better title than he
himself has.
 Examples :-
A finds a ring of B and sells it to a third person who
purchase it for a value and in good faith. The true owner,
i.e., B can recover from that person, for A having no title
could pass none the better.
 Goods of merchantable quality :-
Where the goods are brought by description from a seller
who deals in goods of that description. Whether he is a
manufacture or producer or not, there is an implied
condition that the goods should be of merchantable quality.
 Examples :-
A bought black yarn from D and found it to be damaged by
white ants.
 Sale by sample :-
Where the goods are sold by sample and the goods
supplied by the seller do not correspond with the
sample.
 Example :-
Certain shoes were sold by sample for the French army.
The shoes were found to contain paper not discoverable
by ordinary inspection.
 Held :-
The buyer was entitled to the refund of price plus
damages.
Consent by fraud :-
 Where the seller makes a false statement
intentionally to the buyer and the buyer relies on it
or where the seller knowingly conceals the defects
in the good, the doctrine of Caveat Emptor does
not apply.
THANKYOU