‘Caveat emptor’ means “let the buyer beware”, i.e. in sale of goods the seller is under no duty
to reveal unflattering truths about the goods sold. Therefore, when a person buys some goods,
he must examine them thoroughly. If the goods turn out to be defective or do not suit his
purpose, or if he depends upon his skill and judgment and makes a bad selection, he cannot
blame any body excepting himself.
The rule is enunciated in the opening words of section 16 of the Sale of Goods Act, 1930 which
runs thus: “Subject to the provisions of this Act and of any other law for the time being in force,
there is no implied warranty or condition as to the quality or fitness for any particular purpose
of goods supplied under a contract of sale”

The rule of caveat emptor does not apply in the following cases:

1. Fitness for buyer’s purpose: Where the buyer, expressly or by implication, makes know to
the seller the particular purpose for which he requires the goods and relies on the seller’s
skill or judgment and the goods are of a description which it is in the course of the seller’s
business to supply, the seller must supply the goods which shall be fit for the buyer’s
purpose. (Section16(1).

2. Sale under a patent or trade name: In the case of a contract for the sale of a specified
article under its patent or other trade name, there is no implied condition that the goods
shall be reasonably fit for any particular purpose (Section 16(1).

3. Merchantable quality: Where goods are bought by description from a seller who deals in
goods of that description (whether he is in the manufacturer or producer or not), there is
an implied condition that the goods shall be of merchantable quality. But if the buyer has
examined the goods, there is no implied condition as regards defects which such
examination ought to have revealed. (Section 16(2).

4. Usage of trade: An implied warranty or condition as to qualify or fitness for a particular
purpose may be annexed by the usage of trade. (Section 16(3).

5. Consent by fraud: Where the consent of the buyer, in a contract of sale, is obtained by
the seller by fraud or where the seller knowingly conceals a defect which could not be
discovered on a reasonable examination, the doctrine of caveat emptor does not apply.