The term is primarily used in real property transactions and the basic principle is that "without a warranty the buyer takes the risk" In other words, consumers need to know their rights and be vigilant in avoiding scams. For example in the private purchase of a used car, caveat emptor places an obligation on the buyer to make sure the car is worth the purchase price. This is because once the transaction is complete the buyer will not receive a warranty or return option from the seller.
The buyer can not recover from the seller for defects that renders the property unfit for ordinary purposes. The only exception is if the seller actively conceals latent defects or otherwise makes material misrepresentations amounting to fraud.
Caveat Emptor is expressed in section 16 of the Sale of Goods Act and makes it clear that there is no implied warranty or condition as to quality of fitness of goods for any particular purpose, except those specified in Sale of Goods Act or any other law.
Conditions are certain stipulations which are essential for main purpose of the contract of sale of goods. These go the root of contract and non-fulfilment will mean loss of foundation of contract.
Warranties are collateral assurances or guarantees that certain facets of an article or service sold are as factually stated or legally implied by the seller. Contract cannot be avoided for breach of warranty, but aggrieved party can claim damages.
Whether a particular stipulation in a contract is a condition or warranty depends on the interpretation of terms of contract. A breach of condition can be treated as breach of warranty, but breach of warranty cannot be treated as a breach of condition.
No comments:
Post a Comment