“The expression caveat emptor means buyers beware or before buying the goods, it is the duty of the buyer to ensure that the goods are of the quality which he/she wants”. Discuss the principle with exceptions under sale of goods act
Introduction
Caveat Emptor is the term, discovered before revolution, when trading between parties took place, maybe it was not in terms of monetary transaction, but in terms of barter system. It applies to the necessity of fairness in transaction by applying a rule or law of ensuring the means before completing the transaction. On the other side, Sale of Goods Act was formed later to ensure the fairness in transaction by forming a constitution. Hence, these two concepts can be related and share similar goal, up to some extent. To understand the relation between the term “Cavet Emptor” and Sale of Goods Act and how they share the common goal, that is to protect the buyer, the constitution and the concept must be discussed.
Sale of Goods Act
Sale of Goods Act is the term or generic name used for legislation, formed by the United Kingdom parliament, for the sale of goods. Sale of goods Act is applicable for the contracts where transaction of goods takes place on monetary terms. Though legal rules prescribed by this act are very limited, but contain large number of implied terms and presumptions, which involves most commonly accepted contract of sales. Unless there are any exceptional terms and conditions involved in the sales contract, the sales contract is expected to follow the constitutions of the law. The origin of the Sales of Goods Act 1979 is the Sales of Goods Act 1893. The Sales of Goods Act was modified to include higher level of codification and consolidation of the law, under circumstances.
http://en.wikipedia.org/wiki/Caveat_emptor
http://consumer.findlaw.com/consumer-transactions/what-does-caveat-emptor-mean-.html
http://www.insitelawmagazine.com/salenemodat.htm
http://www.which.co.uk/consumer-rights/regulation/sale-of-goods-act/
http://en.wikipedia.org/wiki/Sale_of_Goods_Act_1893
Caveat Emptor
Caveat Emptor is a Latin term that translates to “buyers beware” in English, established before industrial revolution. In modern world, Caveat emptor is referred as a principle in commerce which states that without a warranty the buyer takes the risk of buying the goods. Under the principle of caveat emptor, it is not possible for the buyer to recover damages from the seller. In other words, the principle of caveat emptor applies as a warning that buyers do not have any option to change anything or charge buyer if the goods do not meet their expectations. For instance – a car transaction, a buyer bought a car at a reasonable with a convenient condition. Later if the car has any mechanical problem, for example, transfusion failure, then the buyer can not do anything against the seller because he had inspected the car and had agreed to all terms and conditions, prior the sale of the car. Hence, the assumption is that the buyer must inspect and ensure the quality, terms and conditions before completing any transaction. Common law states that goods must be “fit for the particular purpose” and of “merchantable quality” but nothing about warranty. Hence, the statutory law was established to implement the warranty ensuring the quality of goods. For instance, in case of buying a cell phone, generally one year or two years warranty provided, so if the phone gets damaged under the terms and conditions of warranty provided, the buyer would definitely get full refund or have it replaced. So, now caveat emptor is no longer the rule of consumer transaction, it is important to know when the exception applies. However, the implied warranty can be difficult to apply or enforce and in addition it might not be applicable for each and every product, term and conditions. Hence, buyers are still advised to be cautious, check quality of the products, go through terms and conditions of the contract carefully before completing the transaction.
“Protect Buyer”
Generally consumers and sellers are allowed to make any legal contracts preferred terms and conditions, agreed by both parties. But still, statutory law can make exception to the contract of sale. Theory of cavet emptor do not apply to all transactions or the buyer or seller but it does bind some transactions under goods of act.(Regulation 1987)
Section 12 refers to title: The seller must have good title (ownership and night to sell the product).For instance-> seller cannot sell stolen good and thus will not obtain “good title”. In this case, buyer might be directed to return stolen goods to the original owner and appeal for compensation from the seller by law.
http://en.wikipedia.org/wiki/Caveat_emptor
http://consumer.findlaw.com/consumer-transactions/what-does-caveat-emptor-mean-.html
http://www.insitelawmagazine.com/salenemodat.htm
www.fsb.org.uk/membership/assets/sale_of_goods_law.doc
Under section 12, similarly an individual subject to hire purchase cannot sell at maturity date because a buyer pay a percentage as a deposit to hire goods and with interest to cover nominal value under terms and condition and only then the individual would be allowed to sell the product. So, section 12 applied against transaction of hire purchase before full payment.
Section 13: Description-> Product sold by description via advertisement must match physically to the description of the advertisement. In addition, Section 13 goods of sale act also ensure 1979 seller must have or obtain the good title (true and legal owner of the goods), otherwise it would be considered as illegal goods. For instance, 1994 model car should be same 1994 model advertised not 1992 or 1996. Point to be noticed is that is section 12 is applicable for consumer and buyer, who is buying this good for business purpose and on the other side, relying on information provided in the registration document would not act as defense.
Section 14(2): Quality-> The sale and supply of Goods Act 1994 introduced regulation for quality maintain termed as satisfactory quality which is applicable for finished goods as well as second hand goods. The act involves fitness for the described purpose, Appearance and finishing of the goods, free of minor defects, durability and safety but act on behalf of buyer would not be applicable to conditions, like, a cell phone got damaged due to misuse or accident. (Physical damage)
In case of durability, the terms and conditions regarding durability must be considered. But still, however, consumer have strong rights to claim even though the goods have been bought long time back, or the claim might not be valid as well. That means each and every claim would be judged on its own circumstances.
Section 14 – fitness for purpose- if the buyer imply specific purposes for which the goods would be required, then the goods must fulfill those requirements, otherwise, case can be filed against the seller, So it can be stated that section 14 goods of sale act 1979 is only applicable in case of business but any individual selling goods privately by advertisement must ensure the description given.
Section 15 – sale by sample- when the sale of goods contract include sales on the basis of sample, in that case the lot or bulk must match to the sample provided. In addition, any defect on the product would have a negative impact on the seller. Under these principles, the buyer would acquire the right to reject the lot under section 15 of sale of goods act 1979.
Remedies
Buyer’s remedy relating to implied term would focus on whether he is buying it on business purpose or as a consumer. Buyers can reject the goods and obtain refund on the basis of the term acceptance of goods. Consumers have additional rights over the buyer under the law. Partial portion of goods would be allowed to be rejected when the goods involve unit basis. For example – garment products – shirts, jeans etc. but in case of machinery or any equipment, particular part of that machinery cannot be rejected. Only whole product cancellation can be applied. Goods will be of satisfactory quality if the quality inspector, buyer or consumer agrees to it. Acceptance would not be approved or the title “acceptance” would not be implied on the buyer until the goods have been properly examined by buyer. Hence, signing contract for delivery of goods do not mean end of the opportunity of ensuring quality of goods neither contract. Hence the opportunity or chance for inspecting the goods must be considered by relating the term “legally accepted”. Even if the defect of product is repaired by the seller prior to the delivery of the goods, it must be stated and explained to the buyer to reflect fairness. Otherwise, the buyer would have the legal rights to reject the goods.
Under sale of goods act 1979, two main remedies lies. First one is to reject goods for appropriate reasons or get partial compensation for the particular portion of loss.
Under section 15 of sales of goods act 1997, it is considered that the goods consist of slight or too minor defects; the law would not allow the buyer to reject the goods. it would be considered as injustice to the seller. Hence the cases are required to be identified and judged on its own circumstances. Buyers may lose the right to reject the lot or portion of the lot only if the already have accepted the goods. But acceptance can be implied not only on the basis of signing the contract for accepting the goods but also if the goods are under the buyer for more than a reasonable period of time. Hence, in this case, under act, it would be preferred to reject the goods before specified period of time.
Supply of Goods and Services Act 1982
A portion of Supply and Services of Goods Act 1982 consists of contracts and legal principles, which are very much similar to Sale of Goods contract. This portion mainly deals with the cases, where services are provided along with the sale of goods.
http://www.oft.gov.uk/business-advice/soga/#.UVCGQxdHJN8
www.fsb.org.uk/membership/assets/sale_of_goods_law.doc
Conclusion
At the end it can be concluded, the term “Cavet Emptor” was applied to the Sale of Goods Act intentionally or unintentionally. The aim or purpose was to inject fairness in trading. The Sales of Goods Act obviously protect both buyers or consumers and seller but under appropriate reasoning and circumstances. Hence, the point can be stated the each and every case is to be judged on its own base under Sales of Goods Act, but it is no defense to rely on the situation or information. Hence, the buyer or consumer must ensure the goods before buying and completing the transaction.
References
http://en.wikipedia.org/wiki/Caveat_emptor
http://consumer.findlaw.com/consumer-transactions/what-does-caveat-emptor-mean-.html
http://www.insitelawmagazine.com/salenemodat.htm
http://www.which.co.uk/consumer-rights/regulation/sale-of-goods-act/
http://en.wikipedia.org/wiki/Sale_of_Goods_Act_1893
<href=”#.UVCGQxdHJN8″>http://www.oft.gov.uk/business-advice/soga/#.UVCGQxdHJN8
www.fsb.org.uk/membership/assets/sale_of_goods_law.doc
http://www.legislation.gov.uk/ukpga/1979/54
http://www.thefreedictionary.com/provision
http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_96410_01