The Latin phrase ‘Caveat Emptor’ basically means ‘let the buyer beware’ is an integral part of The Sale of Goods Act, 1930. In commercial transaction it is the duty of every buyer to be careful while buying goods of their requirements and also the seller is under an obligation to allow the buyer to examine the goods prior to entering into contract. Section 16 of the Act states that the buyer should inspect the goods to their best knowledge as there is no implied condition or warranty as to quality or fitness for any particular purpose of goods supplied. In English Sale of Goods Act, 1893, it was highly noticeable and evident that the seller’s duties as to requirements of disclosure when a product is sold was minimal. In today’s time, the phrase ‘ Caveat Emptor’ has changed to ‘Caveat Venditor’ meaning ‘Let the seller beware’.
For the aforementioned reasons, the rule of Caveat emptor for the first time suffered backlash in the case of Priest v. Last, wherein reliance was placed on the buyer relying on seller’s skill and judgment and the buyer was allowed to reject the goods for the first time. In this case the buyer purchased a hot water bottle relying on the seller’s skill and judgment. It was observed that if a buyer purchases an object relying on the seller’s skill and judgment then the buyer will be allowed to reject the same on the occurrence of any defect.
This was the first ever decision in common law in which importance was given to the buyer’s reliance on the seller’s judgment and skill. In the case of Frost v. Aylesbury Dairy Co. Ltd , A, a milk supplier supplied milk to B’s family. However, the milk contained some typhoid germs. Consequently, B’s wife died of typhoid after consuming the milk. The Court held that the seller was responsible and that the doctrine of Caveat emptor will not apply as the purpose for what the milk was required was known to the seller and the milk he supplied was not fit for human consumption. The exceptions to caveat emptor are as follows :
Where the buyer makes known to the seller the particular purpose for which the goods are required and the buyer relies on seller’s skill & judgement, plus the goods must be described in such a way that it matches the buyer’s choice, it is the duty of the seller to supply such goods which are fit for that buyer.
In case where the goods are purchased under a brand name, then, the rule will apply on the seller so that the customer does not switch to a different brand.
Where the goods are purchased by description there is an implied condition that the goods shall correspond with the description, but if the good does not match the choice of the buyer, the rule wont apply.
Where the goods are brought by sample, the rule wont apply if the goods does not match with the buyer’s choice.
If the good is purchased by both sample & description and the final product does not match the choice of the buyer, then, the buyer may reject the good and the rule of caveat emptor will not apply.
The exceptions, puts a kind of obligation on the seller to make proper disclosures to the best of his knowledge. It is the duty of the seller in today’s time to make the buyer aware of all the defects in the goods being sold and all the information relating to the usage of the goods.
In conclusion, it must be pointed out that the doctrine of caveat emptor is gradually fading with the growth of a new doctrine namely ‘Caveat venditor’. Due to this doctrine, the seller must be very careful while selling his goods. This doctrine was introduced so that the seller should also realize that he has an equal responsibility to provide the goods without any defects to the buyer who buys the goods in good faith. With the introduction of the new phrase, the courts are now mostly in favour of the buyers. Care must be taken that none of the doctrines becomes complicated for either of the parties.
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