7. Discuss the doctrine of caveat emptor and state its exceptions.
Answers
Answer:
It is an exception to the rule which says that when a seller is dealing in goods of a specific description and the goods are being bought by the buyer under such description, it is implied that such goods shall be of merchantable quality.
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Answer:
Caveat Emptor
In case of sale of goods, the doctrine ‘Caveat Emptor’ means ‘let the buyer beware’.
When sellers display their goods in the open market, it is for the buyers to make a
proper selection or choice of the goods. If the goods turn out to be defective, he cannot
hold the seller liable. The seller is in no way responsible for the bad selection of the
buyer. The seller is not bound to disclose the defects in the goods which he is selling.
Exceptions: Following are the exceptions to the doctrine of Caveat Emptor:
1. Fitness as to quality or use: Where the buyer makes known to the seller the
particular purpose for which the goods are required, so as to show that he relies
on the seller’s skill or judgment and the goods are of a description which is in the
course of seller’s business to supply, it is the duty of the seller to supply such
goods as are reasonably fit for that purpose [Section 16 (1) of the Sales of Goods
Act, 1930].
2. Goods purchased under patent or brand name: In case where the goods are
purchased under its patent name or brand name, there is no implied condition that
the goods shall be fit for any particular purpose [Section 16(1)].
3. Goods sold by description: Where the goods are sold by description there is an
implied condition that the goods shall correspond with the description [Section 15].
If it is not so then seller is responsible.
4. Goods of Merchantable Quality: Where the goods are bought by description
from a seller who deals in goods of that description there is an implied condition
that the goods shall be of merchantable quality. The rule of Caveat Emptor is not
applicable. But where the buyer has examined the goods this rule shall apply if
the defects were such which ought to have not been revealed by ordinary
examination [Section 16(2)].
5. Sale by sample: Where the goods are bought by sample, this rule of Caveat
Emptor does not apply if the bulk does not correspond with the sample [Section
17].
6. Goods by sample as well as description: Where the goods are bought by
sample as well as description, the rule of Caveat Emptor is not applicable in case
the goods do not correspond with both the sample and description or either of the
condition [Section 15].
7. Trade Usage: An implied warranty or condition as to quality or fitness for a
particular purpose may be annexed by the usage of trade and if the seller deviates
from that, this rule of Caveat Emptor is not applicable [Section 16(3)].
8. Seller actively conceals a defect or is guilty of fraud: Where the seller sells
the goods by making some misrepresentation or fraud and the buyer relies on it
or when the seller actively conceals some defect in the goods so that the same
could not be discovered by the buyer on a reasonable examination, then the rule
of Caveat Emptor will not apply. In such a case the buyer has a right to avoid the
contract and claim damages.