Legal Perspective: Where the doctrine of 'caveat emptor' applies

The doctrine, caveat emptor, or 'let the buyer beware' applies mainly to the sale of goods contracts. A sale of goods contract is generally defined as "a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price."

This definition applies to all types of goods - big consignments or small units. It is not necessary to observe complex formalities to create a contract for the sale of goods. This contract could be in writing, verbal, partly in writing and partly verbal, or even implied from the conduct of the parties.

There is an implied condition on the part of the seller that in case of a sale he has a right to sell the goods, and in the case of an agreement to sell he will have the right to sell when the property is to pass to the buyer without any difficulties whatsoever. If the seller cannot pass goods (rights of ownership) to the buyer, he will be liable for breach of a condition.

A contract for sale of goods implies many warranties, mainly that the goods are free from any charges of encumbrances (any sort of third party rights) not made known to the buyer before the contract and that the buyer will enjoy quiet possession of the goods.

In case the contract for the sale of goods is by description, there is an implied condition that the goods will correspond with the description if the buyer does not see the goods before he buys them, for example, from a mail order catalogue or from the Internet. In such examples, we can clearly say that there has been sale by description.

Even where the buyer has seen the goods and perhaps selected them himself, it may still be a sale by description provided that he has relied to some extent on a description.

The description of the goods may cover such matters as size, quantity, weight, ingredients, origin, or even how they are to be packed. The slightest departure from the specifications will entitle the buyer to reject the goods for breach of a condition of the contract.

Where the seller sells goods in the course of a business, there is an implied condition that the goods supplied are of merchantable quality, except to the extent of defects which are brought specially to the buyer's attention before the contract is made, or ought to have been noticed by the buyer if he has examined the goods.

Goods are of "merchantable quality" if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect with regard to any description applied to them.

This means that a brand new washing machine should wash clothes properly, new shoes should not fall apart on their first outing, a meat pie bought for your meal should not make you ill after eating that pie, a new computer should work properly, a new house should lodge you etc.

The goods, by all means, do not have to measure up to an absolute standard of quality. If you buy second–hand or at cheap prices, you cannot expect perfection and freedom from inconveniences while using the goods.

If the buyer specifies the particular purpose for which he requires the goods (e.g. shoes suitable for running a marathon), the goods in this case must be suitable for the stated purpose or purposes. Where the buyer purchases goods only for one normal purpose, we could say that he has made his purpose known by implication. Food must be fit for eating and clothes must be fit for wearing.

In all cases, if the buyer has any special requirements, these requirements must be made known to the seller.

In all cases and according to the doctrine of caveat emptor or 'let the buyer beware', there is an obligation on the buyer to take the required standard of care when buying any sort of goods. This rule is very important for our daily life because we buy goods every day for our daily use.

Therefore, we should always be aware and also be careful.