Doctrine of Caveat

Emptor
■ The doctrine of Caveat Emptor is an integral part of the
Sale of Goods Act.
■ It means “let the buyer beware”.
■ It lays the responsibility of their choice on the buyer
themselves.
■ Section 16 of the Act says that “there is no implied
warranty or condition as to the quality or the fitness for
any particular purpose of goods supplied under such a
contract of sale”
■ The Buyer must examine the goods thoroughly
before he makes a purchase.
■ If he makes a purchase upon his own skill and
makes a wrong choice, he must blame himself and
bear the cost of his careless decisions.
 Doctrine of Caveat
Emptor
■ The doctrine attempts to make the buyer more
conscious of his choices.
■ It is the duty of the buyer to check the quality
and the usefulness of the product he is
purchasing.
■ If the product turns out to be defective or does
not live up to its potential the seller will not be
responsible for this.

■ Example: 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 to the Doctrine of
Caveat Emptor
Exceptions to the Rule of Caveat Emptor

1. The Sale of Goods Act, 1930

2. The Indian Contract Act, 1872

3. The Consumer Protection Act, 1986

Exceptions under Sale of Goods Act, 1930
1. Sale by Description

2. Sale by Sample

3. Sale by Sample as well as description

4. In case of Sale by description by a seller who

deals in such class of goods and they are not of
merchantable quality

5. Where the buyer makes known to the seller

the purpose

6. Custom or Usage of Trade

 1. Section 15: Sale by
Description
Where there is a contract for the sale of
goods by description, there is an implied
condition that the goods shall correspond
with the description.
2. Section 15: Sale by Sample as well
as Description

If the sale is by sample as well as by

description, if the bulk of the goods do not
correspond with the description, the buyer
is entitled to reject the goods.

Foreign refined rape oil, warranted only equal to

sample.
Delivered oil equal to the quality of the samples,
but which was not “foreign refined rape oil.”
The goods corresponded with the sample but not
with the description (Nichol & Godt)
3. Section 17: Sale by Sample

If the sale is by sample the bulk of the

goods must match the sample and buyer
be given an opportunity to compare with
the bulk other wise the buyer is entitled to
reject the goods.

Only sample of
one rice bag was
shown
4. Section 16: Sale by description be seller
who deals in such class of goods and they
are not of merchantable quality
The doctrine of caveat emptor does not apply in
case of latent defects or where the buyer has
not been given an opportunity of examining the
goods.

Cooking Coal
ordered, contained
explosives-was not
merchantable
5. Section 16 (1): Where the buyer makes
known to the seller the purpose of goods

The buyer makes it known to the seller the purpose for which
he requires the goods and relies upon the seller’s skill and
judgement but the goods are unfit for the specified purpose,
the principle of caveat emptor does not apply.
 6. Section 16(1): Trade
Name
In the case of a contract for the sale of a
specified article under its patent or other trade
name, there is no implied condition as its
fitness for any particular purpose.
 7. Section 16(2): Merchantable
quality
Where goods are bought by description from a seller
who deals in goods of that description (whether he is
the manufacturer or producer or not), there is an
implied condition that the goods shall be of
merchantable quality;

PROVIDED that, if the buyer has examined the goods,

there shall be no implied condition as regards defects
which such examination ought to have revealed.

Meaning of Merchantable Quality: Merchantable quality

means that if the goods are purchased for resale they must
be capable of passing in the market under the name or
description by which they are sold.
 8. Section 16(3): Usage of
trade
If the trade usage attaches an implied condition
or warranty as to quality or fitness and the
seller deviates, that the doctrine of caveat
emptor does not apply.
Exceptions under Indian Contract, 1872

1. Consent by Misrepresentation

2. Consent by Fraud
 1. Consent by Misrepresentation
Where the seller makes a misrepresentation and the buyer
relies on it, the doctrine of caveat emptor does not apply.

The contract is voidable at the option of the Buyer and he can

rescind the Contract

A who is about to sell a horse to B says “My horse

is sound”
The horse was ill which A was not aware.
B buys the horse.
Misrepresentation on part of A.
 2. Consent by Fraud
Where the seller makes a false statement intentionally
amounting to Fraud to the buyer and the buyer relies on it
or where the seller knowingly conceals the defects in the
good, the rule of caveat emptor will not apply.

The Contract is voidable and the buyer is entitled to rescind

the contract and claim damages for fraud.

Misrepresentation made intentionally is Fraud

Exceptions under Consumer Protection Act
The seller will be responsible in case he sells goods
which are defective.
As per the Consumer Protection of 2019 Act amended, product
liability means the responsibility of a product manufacturer
or product seller, or product
service provider, to compensate
for any harm caused to a consumer by a defective
product manufactured or sold or by
deficiency in services in relation to
the product which marked an end
of the buyer beware doctrine and the
introduction of seller beware
(Caveat Venditor) as the new doctrine
governing the Consumer Protection Act.
THANK YOU