MEANING OF STIPULATION
The seller gives his estimation of the goods he is
selling. His object in doing that is:
a) To give his opinion about the goods.
b) To induce the buyer to purchase the goods. If the
seller induces the buyer to purchase the goods, the buyer can set his
conditions or the purpose.
Such conditions, in a contract of sale, are
stipulations which lawfully bind the seller of the goods does not amount to
stipulation and does not give any right of action to the buyer if the goods to
do not meet the seller estimation.
(Sec 12 (2))
A condition is a stipulation essential to the main purpose of the contract, the
breach of which gives the right to repudiate the contract and to claim damages.
Example:
Say ‘X’ wants to purchase a car from ‘Y’, which can have a mileage of 20 km
/lt. ‘Y’ pointing at a particular vehicle, says “This car will suit you.” Later
‘X’ buys the car but finds out later on that this car only has a top mileage of
15 km/ litter. This amounts to a breach of condition because the seller made
the stipulation which forms the essence of the contract. In this case, the
mileage was a stipulation that was essential to the main purpose of the
contract and hence its breach is a breach of condition.
TYPES OF IMPLIED
CONDITIONS
1. Conditions
as to the title of goods
2. Sale by
description.
3. Quality
and fitness.
4. Conditions as to usage of trade.
MEANING AND DIFINITION OF WARRANTIES.
(Sec 12(3))
A warranty is a stipulation collateral to the main purpose of the said
contract. The breach of warranty which gives rise to a claim for damages.
However, it does give a right to reject the goods or treat the contract as
repudiated.
Example :
• A man buys a particular car, which is warranted to
be quite to drive and very comfortable. It turns out that after some days the
car starts to make a very unpleasant noise every time it is operated. Also
sitting inside it is also not very comfortable.
• Thus the buyer’s only remedy is to claim damages.
This is not a breach of condition but rather a breach of warranty, because the
stipulation made by the seller was only a collateral one.
IMPLIED WARRANTIES
1. The contract of sale has an implied warranty that
the buyer has the right to quit and peaceful possession of the goods.
2. Freedom from charge or encumbrances.
3. Warranty as to specific care.
MEANING OF DOCTRINE
OF CAVEAT EMPTOR OR BUYER BEWARE
• The doctrine of Caveat Emptor is an integral part
of the Sale of Goods Act. It translates to “let the buyer beware”. This means
it lays the responsibility of their choice on the buyer themselves.
• It is specifically defined in Section 16 of the
act “there is no implied warranty or condition as to the quality or the fitness
for any particular purpose of goods supplied under such a contract of sale”
• A seller makes his goods available in the open
market. The buyer previews all his options and then accordingly makes his
choice.
• This doctrine says that the seller will not be
responsible for this. The buyer himself is responsible for the choice he made.
Example:
A bought a horse from B. A wanted to enter the horse
in a race. Turns out the horse were not capable of running a race on account of
being lame. But A did not inform B of his intentions. So B will not be
responsible for the defects of the horse. The Doctrine of Caveat Emptor will
apply.
• However, the buyer can shift the responsibility to
the seller if the three following conditions are fulfilled.
• If the
buyer shares with the seller his purpose for the purchase
• The buyer relies on the knowledge and/or technical
expertise of the seller
• The seller sells such goods
EXCEPTIONS TO THE DOCTRINE OF CAVEAT EMPTOR
1) When the buyer relies on the skill and judgment
of the seller: when the buyer
makes known his requirement to the seller of what he expects from the goods or
how he intends to use them, and relies on the skills and judgment of the
seller, and the deal is made by the seller or manufacturer with the buyer on
such understanding, the doctrine of caveat emptor is not applicable.
2) Fitness for a particular purpose: the implied condition about the fitness of goods
for a particular purpose in terms of quality and usability, in some
circumstances, depends on the customs or practices of a trade, and the doctrine
of ‘beware buyer’ is not applicable.
3) Sale by description: When the buyer buys the goods based only on the
description there will be an exception. If the goods do not match the
description then in such a case the seller will be responsible for the goods.
4) Sale by fraud:
This is another important exception. If the seller obtains the consent of the
buyer by fraud then caveat emptor will not apply. Also if the seller conceals
any material defects of the goods which are later discovered on closer
examination then again the buyer will not be responsible. In both cases, the
seller will be the guilty party.
5) Latent defects:
The seller is responsible to the buyer for all such defects in goods which are
not apparent to a person of normal intelligence. The responsibility of the
buyer to examine the goods for any defects is limited to the extent where the
defects are apparent and can be spotted by the buyer
DIFFERENCES BETWEEN CONDITIONS AND WARRANTIES
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