The Sale of Goods Act-1930

 

The Sale of Goods Act-1930

 

Caveat Emptor

 

Caveat Emptor is a Latin expression which means, “buyers beware”.

The doctrine of caveat emptor means that, ordinarily, a buyer must buy goods after satisfying himself of their quality and fitness.

If he makes a bad choice he can not blame the seller or recover damages from him.

 

The rule probably originated at a time when goods are mostly sold in market overt, and the buyer therefore had every opportunity to satisfy himself as to the quality of the goods or their fitness for a particular purpose.

 

Exceptions:

(a)Where the buyer relies upon the skill and judgment of the seller.

(b)Where by custom an implied condition of fitess is annexed to a contract of sale.

(c)Where there is a sale of goods by description, there is an implied condition that the goods are fit for sale.

(d)Where the seller is guilty of fraud.

 

Exceptions:

A contract of sale of goods must satisfy all the essential elements of a contract and therefore if the consent of the buyer was obtained by fraud the seller is not protected by the doctrine of caveat emptor.

 

Liabilities of a seller 

Sometimes seller may also be liable to pay damages under the Law of Torts if he causes injury by a wrongful act.

Example, N sold to C a tin of disinfectant powder knowing that it would be dangerous to open te tin without special care. C without knowledge of the danger,  opened the tin, whereupon the powder flew  into her eyes and injured them. C sued for damages.

 

Held, N should have warned C of the possible danger and having failed to do so, was liable to pay damages.

      - Clarke v. Army Navy Co-operative Society Ltd, 1903

 

The case of patented articles:

 Ïn 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”-Sec16(1)

If a buyer writes to the manufacturer, “send me one of your patented cotton cleaning machines”, he can not claim the damages if he finds the machine useless

 

But if the buyer asks the manufacture to supply a machine which will clean cotton, he relies on the judgement of the manufacturer and if the machine supplied is found to be unsuitable, he can claim damages.

 

Example, B told a motor car dealer that he wanted a comfortable car for touring purposes. The dealer recommended a car which was being sold under the trade name of X.

       The car was found to be unsuitable and B sued the dealer for damages. It was held that B had relied on the skill and judgment of the dealer and was entitled to get 

 

Transfer of Ownership 

 

Sale of goods involve transfer of ownership of property from the seller to the buyer. The following factors is to be considered:

1. Risk passes with property: The general rule is that risk passes with the property. If the goods are lost or damaged by an accident or otherwise, then, subject to certain exceptions, the loss falls on the person who is the owner at the time when the goods are lost or damaged.

 

2. Who can take action?: When there is danger of goods being damaged by the action of third parties it is the owner who take action.

Passing of risk:

Section 26 lays down the rules regarding the passing of risk.

The general rule is that goods remain at the seller’s risk until the ownership is transferred to the buyer.

 

Passing of risk:

After the ownership has passed to the buyer, the goods are at the buyer’s risk whether delivery has been made or not.

Therefore it is saying that, “Risk follows ownership”. There are 02 exceptions:

1. Where delivery has been delayed through the fault of either the buyer or the seller, the goods are at the risk of the party in fault.

 

Therefore it is saying that, “Risk follows ownership”. There are 02 exceptions:

2. The parties may agreed that the risk will pass at a time different from the time when ownership passed. For example, the seller may, in a particular case, agreed to be responsible for the goods even after the ownership has passed to the buyer.

 

Transfer of title by Non-owner:

The general rule is that only the owner of goods can sell the goods. No one can convey to a transferee a better title than he himself.

If a person transfers articles not belonging to him, the transferee gots no title. This principles is expressed by the Latin phase, “Nemo quid qui non habet”.

 

Exception of the phase “Nemo quid qui non habet”:

1.Estoppel: Under certain circumstances the true owner may be prevented, by his conduct, from denying the seller’s authority to sell.

Suppose that X is the owner of certain goods. X acts in such a manner that Y is induced to believe that the goods belongs to Z. On that belief Y buys the goods from Z.

 

 Under this circumstances, the court will not allow X to provide his ownership. Thus Y gets a good title to the goods even though he has purchased them from Z who is not their owner.