4. Cavaet Emptor is the Latin for ‘let the buyer beware’.
It is the basic premise that the buyer buy at his/her own
risk and therefore should examine and test a product
himself/herself for obvious defects and imperfections.
Cavaet Emptor still applies even if purchase is “as is” or
when a defect is obvious upon reasonable inspection
before purchase.
Recently, consumer protection laws have stated that
the seller is to held a higher standard of disclosure
when the defects of a product cannot be identified
through casual inspection.
5. Purchase By Description:
The rule of caveat emptor does not apply in a case where
goods are brought by description from a seller.
Purchase by samples and Description:
Where goods are bought by samples as well as by
description and the bulk of goods do not correspond with
the description, the buyer is entitled to reject the goods.
Fitness for purpose:
Where the buyer informs the seller the particular purpose
for which the goods are required and relies upon seller’s
skill or judgement.
6. Trade Name:
In case of a contract for a specified article under it’s patent or
other trade name, there is no implied condition as to it’s fitness
for any particular purpose.
Merchantable Quality:
Where the goods are brought by description from a seller who
deals in goods of that description. Whether he is a manufacturer
or producer or not, there is an implied condition that the goods
should be of merchantable quality.
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 of Caveat Emptor does
not apply.
7. Sale By Sample:
In a sale of goods by sample. The rule of caveat emptor
does not apply if the bulk does not correspond with
the sample, or if the buyer is not given an opportunity
to compare bulk with the sample.
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.
8. Akshay wants to buy a 4-wheel drive SUV from his
friend. The SUV is 9 years old, and has about 220,000
KM on it, his friend, Pritesh, assures him that it runs
well. Akshay takes the vehicle for a short test drive, then
decides to buy the vehicle, giving Pritesh his full asking
price of Rs 300000.
Akshay drives the SUV for a week then suddenly it
started making a loud noise. When Akshay questioned
Pritesh about the problem. Pritesh told Akshay that it
needed transmission fluid.
9. Akshay knew that replacing or rebuilding the car’s
transmission would be very expensive, and he didn’t want to
have that kind of hassle. he asked Pritesh to return his
money, but he refused. Akshay filed a civil lawsuit against
Pritesh, asking for his entire payment of Rs 300000 back.
At trial, the judge asks Akshay if he test drove the vehicle
before he bought it, to which he answered “yes.” The judge
also asked if Akshay had a mechanic go over the vehicle
before he bought it. He answered, Yes.
The judge pointed out that it was Akshay’s responsibility to
have a mechanic that didn’t have an interest in the
transaction look at the vehicle. Akshay’s purchase fell under
the principle of caveat emptor, laying the full responsibility of
checking out the car’s condition. The judge ruled in favor of
Pritesh.