Meaning of Caveat Emptor
The principle of Caveat Emptor, meaning “let the buyer beware”, is embodied in Section 16 of the Sale of Goods Act, 1930. It states that, in general, the seller is not bound to disclose defects in the goods sold, and the buyer must take reasonable care to examine the goods before purchase. The rationale behind this principle is that buyers are expected to use their own judgment and skill, ensuring they are satisfied with the goods’ quality and suitability. This rule protects sellers from being held responsible for every defect, provided there is no fraud or misrepresentation.
Legal Principles and Limitations
Though Caveat Emptor is the general rule, the Act provides several exceptions where the seller will be held liable. If the buyer makes known the purpose for which goods are required and relies on the seller’s skill, then the goods must be reasonably fit for that purpose (Section 16(1)). Similarly, if goods are sold by description, they must correspond with that description (Section 15). If sold by sample, they must match the sample (Section 17). Thus, Caveat Emptor is not absolute—it is limited by conditions of fitness, merchantable quality, and absence of fraud.
Real-Life Example
Suppose a buyer purchases a smartphone without asking about its features and later finds it does not support 5G. Here, the principle of Caveat Emptor applies because the buyer failed to check or specify requirements before buying. However, if the buyer had asked for a 5G-enabled phone and the seller knowingly sold a 4G device, then the seller would be liable under the exceptions to Caveat Emptor. This example shows that the rule balances responsibility between the buyer and seller, depending on the facts of the transaction.
Mnemonic to Remember Exceptions (3 Key Points)
👉 “DFS” = Description, Fitness, Sample
- D → Goods must match their Description
- F → Goods must be Fit for the buyer’s purpose
- S → Goods must correspond with the Sample shown
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