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CA Foundation · Business Laws · The Sale of Goods Act, 1930

Arjun agrees to buy a lot of 100 bags of cement from Bharat Traders by sample. On delivery, the bulk matches the sample in quality, but Arjun finds that the cement has a defect that no reasonable examination of the sample could have revealed, making it unusable. Which statement is correct?

Bharat Traders is liable. In a sale by sample there is an implied condition that the goods are free from any hidden defect rendering them unmerchantable that reasonable examination of the sample would not reveal. Matching the sample does not protect the seller, so caveat emptor does not apply.

  1. ABharat Traders is not liable because the bulk matched the sample
  2. BBharat Traders is liable because there is an implied condition that goods will be free from any defect, rendering them unmerchantable, that would not be apparent on reasonable examination of the sampleCorrect
  3. CArjun can only claim damages as it is a warranty
  4. DArjun must bear the loss because of caveat emptor

Explanation

In a sale by sample, there is an implied condition that the goods will be free from any defect making them unmerchantable which would not be apparent on reasonable examination of the sample. Matching the sample does not excuse a hidden defect. Option D fails because this exception to caveat emptor applies.

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