Caveat emptor is a combination of two Latin words. Caveat means caution or warning or beware; and Emptor means the buyer, the purchaser. Caveat emptor means: Let the purchaser beware. It is a disclaimer of liability for buyer’s disappointment. It is one of the settled maxims, applying to a purchaser who is bound by actual as well as constructive knowledge of any defect in the thing purchased, which is obvious or which might have been known by proper diligence.
EXCEPTIONS TO THE RULE OF CAVEAT EMPTOR
There are certain exceptions to this rule of caveat emptor. They are:
**PURCHASE BY DESCRIPTION- The rule of caveat emptor does not apply in a case where goods are bought by description from a seller. In such a situation there is an implied condition that the goods shall correspond with the description. It is a condition which goes to the root of the contract, and the breach of it entitles the buyers to reject the goods.
** PURCHASE BY SAMPLES AND DESCRIPTION - Where goods are bought by sample as well as by description and the bulk of goods do not correspond with the sample or with the description, the buyer is entitled to reject the goods. The rule of caveat emptor shall not apply in such a case.
** FITNESS FOR PURPOSE - Where the buyer informs the seller the particular purpose for which the goods are required and relies upon the seller’s skill or judgment there is in that case, an implied condition that the goods shall be reasonably fit for the purposes for which they are required.
** 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 to its fitness for any particular purpose.
** MERCHANTABLE QUALITY- Where the goods are bought by description from a seller who deals in goods of that description whatever he is manufacturer or producers or not, there is an implied condition that the goods shall 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.
** 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 opportune ity 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.
** In every contract of sale there is an implied condition that the seller has a right to sell the goods and in an agreement to sell he has a right to sell the goods at the time when the property is to pass. The transfer of title to the goods can only be made either by the owner or an agent.
Introduction
Caveat emptor is a Latin term meaning "let the buyer beware". It is a general rule of law that a purchaser assumes the risk of his/her purchase. The intent of the rule is to place a duty of care on the buyer in selecting an item and putting forth appropriate inquiry before completing the sale. In this way, a seller is also protected from liability for buyer's remorse.
There are certain exceptions to this rule of caveat emptor. They are:
**PURCHASE BY DESCRIPTION- The rule of caveat emptor does not apply in a case where goods are bought by description from a seller. In such a situation there is an implied condition that the goods shall correspond with the description. It is a condition which goes to the root of the contract, and the breach of it entitles the buyers to reject the goods.
** PURCHASE BY SAMPLES AND DESCRIPTION - Where goods are bought by sample as well as by description and the bulk of goods do not correspond with the sample or with the description, the buyer is entitled to reject the goods. The rule of caveat emptor shall not apply in such a case.
** FITNESS FOR PURPOSE - Where the buyer informs the seller the particular purpose for which the goods are required and relies upon the seller’s skill or judgment there is in that case, an implied condition that the goods shall be reasonably fit for the purposes for which they are required.
** 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 to its fitness for any particular purpose.
** MERCHANTABLE QUALITY- Where the goods are bought by description from a seller who deals in goods of that description whatever he is manufacturer or producers or not, there is an implied condition that the goods shall 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.
** 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 opportune ity 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.
** In every contract of sale there is an implied condition that the seller has a right to sell the goods and in an agreement to sell he has a right to sell the goods at the time when the property is to pass. The transfer of title to the goods can only be made either by the owner or an agent.
Introduction
Caveat emptor is a Latin term meaning "let the buyer beware". It is a general rule of law that a purchaser assumes the risk of his/her purchase. The intent of the rule is to place a duty of care on the buyer in selecting an item and putting forth appropriate inquiry before completing the sale. In this way, a seller is also protected from liability for buyer's remorse.
A seller is under no duty to reveal unflattered truths about the goods sold and therefore, whenever the buyer buys goods, he must exercise necessary care in his own interest. A buyer, in contract of sale of specific goods, purchases the goods at his own risk as regard as the quality, price of the goods except on the case of fraud or when any condition to that effect is laid down in the contract. A buyer cannot hold the seller responsible and liable if the goods turn out to be defective or do not prove to be useful for the purpose for which they are purchased or if the buyer makes any mistake in assessing the quality of goods purchased. Thus it is for the buyer to ensure himself only at the time only at the time of purchase that goods confirm his own requirements.
In one case, A sent some pigs to market to be sold by auction. B purchased the goods with all its faults and errors of description. A knew that pigs were suffering from fever but he did not disclose the same to B. it was held in the case that there was no implied warranty by A and the sale was good and A was not liable for any damages.
Caveat emptor does not mean either in law or in Latin that the buyer must take chances, it means that the buyer must take care.
In the good olden days the principle of ‘Caveat emptor’, which meant buyer beware governed the relationship between seller and the buyer. In the era of open markets buyer and seller came face to face, seller exhibited his goods, and buyer thoroughly examined them and then purchased them. It was assumed that he would use all care and skill while entering into transaction. The maxim relieved the seller of the obligation to make disclosure about the quality of the product. In addition, the personal relation between the buyer and the seller was one of the major factors in their relations.
According to this rule, the buyer himself should be careful while purchasing the goods suit his purpose. If the goods are subsequently found to be unsuitable for the purpose, he cannot blame the seller for the same. The buyer ordered for hessian cloth without specifying the purpose for which he wanted the same. It was in fact needed for packing. Because of unnatural smell, it was unsuitable for that purpose. It was held that buyer had no right to reject the same, even if it did not serve his purpose.
Exception to this doctrine
In case of sale by description
Section 15 lays down the condition which is implied by law in a sale by description. Section 15 says, “Where there is a contract for sale of goods by description, there is an implied condition that the goods shall correspond with the description.” The term ‘correspond to description’ as used in Section 15 means the buyer must get the article or goods that was described in the contract. The buyer must have contracted for them as described so that the falsity of the description made the goods substantially different things from those that were described so as to constitute a failure of consideration.
Goods are to be sold by description when the contract contains a description of the goods to be supplied. Such description may be in terms of the physical characteristics of the goods or may simply mention the trade mark, trade name, brand or label under which they are usually sold. A sale of 50 boxes of X brand soap or of 10 tons of Y brand mustard oil, is a sale of goods by description. In such cases the goods supplied must be the same as the goods described.
Section 15 lays down the condition which is implied by law in a sale by description. Section 15 says, “Where there is a contract for sale of goods by description, there is an implied condition that the goods shall correspond with the description.” The term ‘correspond to description’ as used in Section 15 means the buyer must get the article or goods that was described in the contract. The buyer must have contracted for them as described so that the falsity of the description made the goods substantially different things from those that were described so as to constitute a failure of consideration.
Goods are to be sold by description when the contract contains a description of the goods to be supplied. Such description may be in terms of the physical characteristics of the goods or may simply mention the trade mark, trade name, brand or label under which they are usually sold. A sale of 50 boxes of X brand soap or of 10 tons of Y brand mustard oil, is a sale of goods by description. In such cases the goods supplied must be the same as the goods described.
Lord Blackburn stated the general principle contained in section 15 in the following words, “If you contract to sell peas you cannot oblige a party to by beans. If the description of the article tendered is different in any respect, it is not the article bargained or, and the other party is not bound to take it.”
The expression “description” in the phrase “sale by description” usually means a particular class of goods. It also includes the statement which may be essential to the identity of the goods contracted for, e.g., as to quality of fitness, place of origin, or of shipment, time of dispatch or delivery, mode of packing, etc. Sale by describing as ‘new’ is in every case a question of fact and degree. Where the parts of a car are damaged by fire and the car is not capable of restoration to what can be described as ‘new’ condition, the plantiff is entitled to rescind the contract.
A contract for the sale of 3,000 tins of peaches described the tins as being packed in cases of 30. When they arrived the tins were packed in cases of 24 although the agreed overall number of tins was supplied. It was held that the purchaser was entitled to reject the goods as they were not as described.
The claimant purchased a painting from the defendant for £6,000. The painting was described in an auction catalogue as being by German impressionist artist Gabrielle Munter. Both the buyers and the sellers were London art dealers. The sellers were not experts on German paintings whilst the buyers specialized in German paintings. The purchasers sent their experts to inspect the painting before agreeing to purchase. After the sale the buyers discovered that the painting was a fake and worth less than £100. They brought an action based on s.13 Sale of Goods Act in that the painting was not as described. Held: By sending their experts to inspect the painting this meant the sale was no longer by description. S.13 only applies to goods sold by description and therefore the buyers had no protection.
A contract for the sale of a quantity of wooden staves for making barrels described the staves as being 1/2 an inch thick. Some of the staves delivered were not 1/2 an inch thick but very slightly out. There was nothing wrong with the quality of the wood and they could still be used for the intended purpose of making barrels. The buyer rejected the goods. Lord Atkin observed: if the written contract specifies conditions of weight, measurement, and the like, those conditions must be complied with.
Sale by sample and description
Sometimes there may be a difference between the sample shown and the description of the goods. In such a case, the fact that the goods supplied conform to the sample but did not agree with the description, entitle the buyer to reject the goods because the fundamental condition in every contract is that the good should correspond to description.
Nichol showed samples of oil to Godts. He described the oil as "Foreign refined rape oil, warranted only equal to samples?. Godts entered into a written contract to buy 33 tons. The oil corresponded with the sample, but not the description. It was a mixture of rape and hemp oil. Godts refused to accept or pay the goods. The jury found that the admixture was not known not commercially known as "foreign refined rape oil", and therefore, it was held that since the oil supplied was not in accordance with description, the buyer was entitled to recover damages.
Condition as to quality or fitness
In a contract for sale, normally there is no implied condition as to quality or fitness of those goods for any particular purpose. The buyer has to examine and satisfy himself whether the goods or article will be suitable for the purpose for which he requires the same. The purpose for which goods are required is implied of these particular goods are purchased from a dealer dealing in those particular goods and if the goods subsequently turn out to be unfit for the purpose required, they can be rejected. Particular purpose for which goods are required is to be disclosed where goods can be used for more than one purpose.
Where a buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose. In a case buyer purchased a radio-set for a specific purpose. It could easily be said that the vendor sold this radio set for that specific purpose. It has, therefore to be of a certain quality. If it is not of that quality and it is not fit for such purpose, then the law implies a promise from the vendor that he will supply to the purchaser an article of that quality and reasonably fit for the purpose for which it is required. The seller’s liability in such cases to supply goods that are reasonably fit an absolute one.
It is not necessary that the buyer should expressly or by implication make known to the seller a particular purpose. The words by implication in Sec 16(1) clearly indicate that the communication of the purpose to the seller need not be expressed in words. It may be inferred from the description of the goods given by the buyer to the seller or from the circumstances of the case. The buyer must rely on the seller’s skill or judgment. When the good can be used for only one purpose, the purpose need not be told to the seller as he is deemed to know the same. In these cases there is a implied condition as to quality of fitness for a particular purpose may be annexed by usage or trade. The plaintiff, who was a draper and had no special knowledge of hot water bottles, went to a chemist and asked for a "hot water bottle". The defendant sold him a rubber bottle, saying that it would stand hot but not boiling water. The plaintiff had purchased the bottle for his wife and while she was using, it burst and injured her. Since the bottle was not fit for tat ‘particular purpose’ so it was held, which the bottle supplied, must be fit for use as a hot water bottle.
There was a contract to supply 500 tons of coal for the S.S. "Manchester Importer". The coal supplied was found to be unfit for this ship. It was held that the buyer was entitled to get damages. in this case it was held that a buyer relies on the skill of the seller when he makes known to him the purpose for which the goods are required and the circumstances are such that any reasonable seller would take it that his judgment is being relied upon.
W supplied J with tinned salmon which was poisonous. J fell ill and his wife died as a result of eating the salmon. Held, there was an implied' condition of fitness because the seller obviously knew that the salmon was being purchased for consumption. The condition was violated by the grocer and damages were recoverable.
In the case of eatables or foodstuffs and provisions, in addition to the implied condition that the goods shall be wholesome, pure, unadulterated, and also suitable for consumption at time of sale. For Example, M a milk dealer supplied F with milk which was consumed by F and his family. The milk contained germs of typhoid. F's wife was infected and died. The purpose for which the milk was to be used was, by implication, made known to the seller. Held, there was a breach of an implied condition of fitness and A was liable to pay damages.
Kendall v Lillico concerned a contract for Brazilian ground nuts extract, sold for the purpose of compounding into feed stuffs for cattle and poultry. The buyer used the goods for feeding his turkeys. This proved to be fatal. Evidence showed the extract was not dangerous to cattle. There was a breach of condition.
Proviso to 16(1)
When the buyer buys an article by specifying its patent or other trade name, there is no implied condition of the fitness of the goods for any particular purpose. Since the buyer buys the good specifying the trade name, the seller’s only undertaking is that the good shall be of the same trade name as demanded by the buyer. If the buyer mentions the trade name but still relies on the skill and judgment of the seller as regards the suitability of the goods for any particular purpose, the implied condition of fitness will be applicable.
Implied condition of 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.
Merchantable quality: The Act does not give any definition, yet, the word has by long use become a term of art in commercial law. Merchantable quality means that the goods comply with the description in the contract so that to a purchaser buying goods of that description the goods would be good tender.
Goods are of merchantable quality if they are of such a quality and in such condition that a reasonable man, acting reasonably, would, after a full examination, accept them under the circumstances of the case in performance of the offer to buy them, whether he buys for his own use or to sell again.
Goods cease to be merchantable because of defects rendering them unfit for the purpose for which they are usually sold or merchantability is fulfilled when the goods do not differ from the normal quality of the described goods including under the term quality the state or condition as required by the contract. The goods should be immediately saleable under the description by which they are known in the market.
The defendants ordered for some 600 motor horns of varying description. Some motor-horns were to be delivered by installments. The first installment was accepted but the second contained a substantial quantity of horns which were damaged owing to bad packing. Held, the buyer was entitled to reject the whole installment as the goods were not saleable quality.
The plaintiff asked for and purchased a bottle of “Stone’s Ginger Wine” from the seller. When the buyer was drawing the cork the bottle broke and at he was injured. It was held that the sale was one by description and since the bottle was not of merchantable quality so the buyer was entitled to recover damages.
In the case , the underwear’s contained certain chemicals which could cause skin disease to a parson wearing them next to skin, it was held that because of such a defect the underwear’s were not of merchantable quality.
A firm of merchants contracted to buy from S some bales of Manila Hemp. This was to arrive from Singapore. The hemp arrived wetted with sea water. It was so damaged that it was not possible to sell it as Manila hemp in the market. The court held that the hemp was not of merchantable quality and it was entitled to be rejected.
Proviso to 16(2)
The proviso, however, divides such defects into two kinds, often called patent and latent defects. Patent defects are those which can be found on examination by a person of ordinary prudence with the exercise of due care and attention. Latent defects are those which cannot be discovered on such examination. There is an implied condition on the seller's part that the goods are free from latent defect. This condition exists in regard to patent defects as well, if there has been no examination of the goods by the buyer.
If there has been one, the seller's responsibility for them ceases and passes to the buyer. Whether a defect is latent or patent will depend on the nature of the goods and the nature of the defects and the extent of examination needed for its discovery. It is a question of fact in each case. For a case where a latent defect rendered the goods unmerchantable even though there was a thorough examination by the buyer's experts.
The defendants, who were desirous of purchasing a quality of vegetable ghee from plaintiffs who dealt in that commodity, went, by arrangement with plaintiffs, to the warehouse where the ghee, which was in barrels, was stored, for the purpose of inspecting it. Every facility was offered to defendants for inspection; but, being pressed for time, they did not have any of the barrels opened, and merely looked at the outside of the barrels. Defendants purchased the ghee, and after it was delivered they alleged that it was not of merchantable quality. It was held that the defendants had examined the goods and consequently there was no implied condition that the ghee was to be of merchantable quality.
Implied conditions in sale by sample
A contract of sale is a contract for sale by sample where there is a term in the contract, express or implied, to that effect. Clause 2 provides, In the case of a contract for sale by sample there is an implied condition
(a) that the bulk shall corresponded with the sample in quality.
(b) that the shall have a reasonable opportunity of comparing the bulk with the sample.
(c) that the goods shall be free from any defect, rendering them un-merchantable, which would not be apparent on reasonable examination of the good.
A contract of sample by sale implies an undertaking by the seller that the goods to be supplied will be similar to the sample. If the goods supplied do not correspond with the sample, it amounts to breach of implied condition by the seller, and the buyer, in such a case is entitled to reject the goods. If the buyer instead of rejecting the goods accepts the good or in part thereof, when the contract is not severable, then his only remedy is to claim damages.
If the seller doesn’t afford an opportunity to the buyer to compare the bulk with the sample at a proper and convenient time, the buyer has a right to repudiate contract. The right to inspect goods need not be exercised before taking the delivery. If on exercising the right of examining the goods, the buyer finds that the goods are not in conformity with the sample, he may reject them. It’s not good enough that the good correspond with the sample, it is further necessary that the goods should not have been rendered unmerchantable because of some latent defect in the sample.
Two parcels of wheat were sold by sample. The buyer went to examine the wheat a week later. One parcel was shown to him but the seller refused to show the other parcel as it was not there. In this case the buyer was not given reasonable opportunity to test the bulk with the sample. The court held that the buyer was entitled to reject the contract of sale.
A agreed to buy some rubber material from B. The sample of the rubber was shown to A. On receiving the rubber material, A found that the measurement of the rubber material was different from that of the sample. The court held that measurement of the rubber material was part of its quality. It was held that the goods did not correspond to the sample.
The plantiffs who were cloth manufacturers, agreed to supply “mixed worsted coatings” as per certain sample. The goods when supplied corresponded to the sample but subject to some default they were not capable of being converted into coats. It was found that owing to a hidden defect of the cloth which could not be detected on reasonable examination, coats made out of it could not stand ordinary wear and were, therefore unsalable. The buyer was held to be entitled to damage.
Consent by fraud
In case the consent of the buyer in a contract or sale is taken by fraud on the part of the seller, the entire responsibility for the consequences rests with the seller. Who is liable to compensate the buyer for any loss that he might be put to because of it. The law doesn’t allow a recourse to the doctrine of ‘buyer beware’ to the seller in case of fraud.
Conclusion
The effect of the maxim caveat emptor is that a person has no duty to disclose problems voluntarily. Thus, if one person is laboring under a misapprehension, there is no duty on the other person to correct it. However, there are three fundamental exceptions to this rule:
** The representor must not misleadingly tell only part of the truth. Thus, a statement that does not present the whole truth may be regarded as a misrepresentation.
** Where a statement was true when made out but due to a change of circumstances has become false by the time it is acted upon, there is a duty to disclose the truth.
** Contracts uberrimae fidei (contracts of the utmost good faith) impose a duty of disclosure of all material facts because one party is in a strong position to know the truth. Material fact is something which would influence a reasonable person in making the contract. If one party fails to do this, the contract may be avoided. Where there is a fiduciary relationship between the parties to a contract, a duty of disclosure will arise, for example, solicitor and client, bank manager and client, trustee and beneficiary, and inter-family agreements.
The rule of caveat emptor appeared to play an important role in the past when trade was conducted on local scale and the buyer had every opportunity to examine the goods before buying. However, in the modern context the rigors of the rule have been mitigated because of global dimensions of trade, government legislations on consumer protection, profession management and intense competition and consumer awareness. In fact, the rule of caveat emptor should be replaced by the rule of ‘caveat vendor’ (Let the seller beware).
BIBLIOGRAPHY
Books
** Bangia, R.K. , Sales of Good Act, 9th edition, Allahabad Law Agency, Delhi, 2012.
** Singh, Avtar, Law of Sales of Good, 7th edition, Eastern Book Company, Lucknow, 2011.
** Padhi, P.K., Legal aspects of business, PHI Learning Pvt. Ltd., 2012
** Saharay,Dr. Madhusudan,Textbook on Sale of Goods and Hire Purchase,Universal Law Publishing,New Delhi 2010.
** Chakraborty , R., Law of sales of good and partnership, 1st edition, Orient Publishing Company, New Delhi 2006.
Internet Sites and Documents
** http://consumereducation.in/publications/1_consumer_orotection_%20in_India.pdf
** http://www.citeman.com/7032-caveat-emptor-buyer-beware.html
** http://www.indiankanoon.org/doc/1649627/
** http://www.e-lawresources.co.uk/Statutory-implied-terms.php
** http://www.nadr.co.uk/articles/published/shipping/003CHAPTERTHREETRADE1.pdf
** http://www.icai.org/resource_file/19057comp_sugans_pe2_bcl_cp2.pdf
** http://www.lawyersclubindia.com/articles/Rule-of-Caveat-Emptor-5399.asp#.UmuC_vlmiSo
** http://munirahmadmughal.hubpages.com/hub/Caveat-Emptor-Rule
TABLE OF CASES
** Arcos v Ranaason [1933] AC 470
** Bajrangi Parshad v. Provincial Govt. C. P. and Berar, AIR 1951 Nag 301
** Bows v. Shan.
** Bristol Tramway Co. v. Fiat Motors Ltd., (1910) 2 KB 831
** Drummond v. Van Ingen, (1887) 12 A.C. 284
** E & S Ruben Ltd v.Fair Bros, 1949 1K.B.254.
** Frost v. Aylesbury Diary Co., (1905) 1 K.B. 608.
** Grant v. Australian Knitting Mills Ltd., (1954) 1 Q.B. 598
** Harlington & Leinster v. Christopher Hull Fine Art, [1991] 1 QB 564
** Jackson vs. Watson & Sons.
** Jacksone v. Rotax Motor and Cycle Co., (1910) 2 K.B. 937.
** Jones v. Just, 1868LR 3 QB 197, B & Co
** Kendall v Lillico ,[1969] 2 A.C. 31.
** Lorymer v. Smith., (1882) 1 B & C 1
** Manchester Lines v. Rea Ltd., 1922 A.C. 74.
** Morelli v. Fitch and Gibbons., (1928) 2 K.B. 636
** National Traders v. Hindustan Soap Works, AIR 1959 Mad 112.
** Nichol v. Godts, 1854 10 Ex. 191
** Priest v. Last, 1903 2 K.B. 148.
** Raynham Farm Co. Ltd. v. Symbol Motor Corpn. Ltd, 1987 BTLC 157 (QBT)
** Re Andrew Yule & Co., AIR 1932 Cal. 879
** Re Moore & Landauer [1921] 2 KB 519
** Sorabji Hormusha Joshi And Co. v. V.M. Ismail And Anr., AIR 1960 Mad 520.
** Summer Permain and Co., Ltd. v. Webb and Co., Ltd., (1922) 1 KB
** Wallis v. Russell (1902) 21 R 585
** Ward v. Hobbs, 1878
The effect of the maxim caveat emptor is that a person has no duty to disclose problems voluntarily. Thus, if one person is laboring under a misapprehension, there is no duty on the other person to correct it. However, there are three fundamental exceptions to this rule:
** The representor must not misleadingly tell only part of the truth. Thus, a statement that does not present the whole truth may be regarded as a misrepresentation.
** Where a statement was true when made out but due to a change of circumstances has become false by the time it is acted upon, there is a duty to disclose the truth.
** Contracts uberrimae fidei (contracts of the utmost good faith) impose a duty of disclosure of all material facts because one party is in a strong position to know the truth. Material fact is something which would influence a reasonable person in making the contract. If one party fails to do this, the contract may be avoided. Where there is a fiduciary relationship between the parties to a contract, a duty of disclosure will arise, for example, solicitor and client, bank manager and client, trustee and beneficiary, and inter-family agreements.
The rule of caveat emptor appeared to play an important role in the past when trade was conducted on local scale and the buyer had every opportunity to examine the goods before buying. However, in the modern context the rigors of the rule have been mitigated because of global dimensions of trade, government legislations on consumer protection, profession management and intense competition and consumer awareness. In fact, the rule of caveat emptor should be replaced by the rule of ‘caveat vendor’ (Let the seller beware).
BIBLIOGRAPHY
Books
** Bangia, R.K. , Sales of Good Act, 9th edition, Allahabad Law Agency, Delhi, 2012.
** Singh, Avtar, Law of Sales of Good, 7th edition, Eastern Book Company, Lucknow, 2011.
** Padhi, P.K., Legal aspects of business, PHI Learning Pvt. Ltd., 2012
** Saharay,Dr. Madhusudan,Textbook on Sale of Goods and Hire Purchase,Universal Law Publishing,New Delhi 2010.
** Chakraborty , R., Law of sales of good and partnership, 1st edition, Orient Publishing Company, New Delhi 2006.
Internet Sites and Documents
** http://consumereducation.in/publications/1_consumer_orotection_%20in_India.pdf
** http://www.citeman.com/7032-caveat-emptor-buyer-beware.html
** http://www.indiankanoon.org/doc/1649627/
** http://www.e-lawresources.co.uk/Statutory-implied-terms.php
** http://www.nadr.co.uk/articles/published/shipping/003CHAPTERTHREETRADE1.pdf
** http://www.icai.org/resource_file/19057comp_sugans_pe2_bcl_cp2.pdf
** http://www.lawyersclubindia.com/articles/Rule-of-Caveat-Emptor-5399.asp#.UmuC_vlmiSo
** http://munirahmadmughal.hubpages.com/hub/Caveat-Emptor-Rule
TABLE OF CASES
** Arcos v Ranaason [1933] AC 470
** Bajrangi Parshad v. Provincial Govt. C. P. and Berar, AIR 1951 Nag 301
** Bows v. Shan.
** Bristol Tramway Co. v. Fiat Motors Ltd., (1910) 2 KB 831
** Drummond v. Van Ingen, (1887) 12 A.C. 284
** E & S Ruben Ltd v.Fair Bros, 1949 1K.B.254.
** Frost v. Aylesbury Diary Co., (1905) 1 K.B. 608.
** Grant v. Australian Knitting Mills Ltd., (1954) 1 Q.B. 598
** Harlington & Leinster v. Christopher Hull Fine Art, [1991] 1 QB 564
** Jackson vs. Watson & Sons.
** Jacksone v. Rotax Motor and Cycle Co., (1910) 2 K.B. 937.
** Jones v. Just, 1868LR 3 QB 197, B & Co
** Kendall v Lillico ,[1969] 2 A.C. 31.
** Lorymer v. Smith., (1882) 1 B & C 1
** Manchester Lines v. Rea Ltd., 1922 A.C. 74.
** Morelli v. Fitch and Gibbons., (1928) 2 K.B. 636
** National Traders v. Hindustan Soap Works, AIR 1959 Mad 112.
** Nichol v. Godts, 1854 10 Ex. 191
** Priest v. Last, 1903 2 K.B. 148.
** Raynham Farm Co. Ltd. v. Symbol Motor Corpn. Ltd, 1987 BTLC 157 (QBT)
** Re Andrew Yule & Co., AIR 1932 Cal. 879
** Re Moore & Landauer [1921] 2 KB 519
** Sorabji Hormusha Joshi And Co. v. V.M. Ismail And Anr., AIR 1960 Mad 520.
** Summer Permain and Co., Ltd. v. Webb and Co., Ltd., (1922) 1 KB
** Wallis v. Russell (1902) 21 R 585
** Ward v. Hobbs, 1878
The work contained herein is an amalgamation of the remarkable work of various authors and I am thankful to them for their publications that have helped me prepare this research paper to the best of my abilities.
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