ISSUE : 1 Whether there was valid contract of sale established between the plaintiff and

defendants ?

It is humbly contended before this court that there was valid contract of sale between the
plaintiff and the defendants.

Section 41 of the Sales of Goods Act, 1930 defines a sale of goods as “contract of sale”
whereby the seller transfers or agrees to transfer the property in goods to the buyer for a
price”. The contract of sale includes both a sale and an agreement to sell.

In the case of Agricultural Market Committee v. Shalimar Chemical Works Ltd2; the
Supreme Court observed that a contract of sale, like any other contract, is a consensual act in
as much as the parties are at liberty to settle for themselves the term of their bargain. A sale
has two poles one buyer and another seller. One has to give and another has to accept. The
giver has of-course to receive a sum, i.e. negotiated upon, in lieu of the `goods' given by him
or sold by him.

A sale is always a consensual transaction; even when the word `sale' is used in the narrower
sense of a pure conveyance, there is necessarily an antecedent or contemporaneous agreement
to sell. There must be mutual assent, in the objective sense in which this expression is always
understood in the law of contract, to all the elements which make up a sale. The seller must
agree to transfer the property and the buyer to take it, and they must agree to do so in return
for money which is paid and received as the price of goods3.

Goods has been defined in section 2(7) of the Act as follows:

1
(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in
goods to the buyer for a price. There may be a contract of sale between one part-owner and another.

(2) A contract of sale may be absolute or conditional.

(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the
contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or
subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.

(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the
property in the goods is to be transferred
2
(1997) 5 SCC 516: AIR 1997 SC 2502
3
Sweet & Maxwell, ‘Benjamin’s Sale of Goods’, 2010, Eighth Edn. Thomson Reuters (Legal) Limited, London
"Goods" means every kind of movable property other than actionable claims and money;
and includes stock and shares, growing crops, grass and things attached to or forming part
of the land which are agreed to be severed before sale or under the contract of sale.

From this definition, we can say that Goods means every kind of movable property other
than actionable claims and money.

In the case, R.D. Goyal v. Reliance Industries Ltd4; under the category of goods, thing
like goodwill, copyright, trademark, patents, motor vehicles, ships, water, oil, air, gas may
be considered as goods for a contract of sale.

In the given set of facts both the plaintiff and the defendant were on consensual terms for
the plaintiff buying the buggy and the seller selling the buggy as the seller had transferred
the buggy that form the preface of goods and the buyer took it for a sum of amount not
disclosed creating a valid contract of sale.

4
MANU/SC/1025/2002
ISSUE 2 : Whether the plaintiffs can claim damages from the defendants?

It is humbly contended before this court that the plaintiffs can claim damages from the
defendants.

The principle of Caveat Emptor will not be applicable

The maxim caveat emptor states that it is for the buyer to satisfy himself that the goods which
he is purchasing are of the quality which he requires or, if he is buying for any specific
purpose, that they are fit for that for purpose.

the rule regarding Caveat Emptor in the case of Sale of Goods states, goods which are in esse
and may be inspected by the buyer, and there is no fraud on the part of the seller, the maxim
Caveat Emptor applies, even though the defect which exists in them is latent, and not
discoverable on examination, at least where the seller is neither the grower nor the
manufacturer.5

The principle of “Caveat Emptor” will not apply due to some of the recognised exceptions to
the rule according to Common Law and also been covered in the India in the Sale of Goods
Act.

Firstly, there as a fraud committed on part of the seller because of his nondisclosure of a
relevant factor for purchase;

Secondly, ‘where a manufacturer or a dealer contracts to supply an article which he

manufactures or produces, or in which he deals, to be applied to a particular purpose, so that
the buyer necessarily trusts to the judgement or skill of the manufacturer or dealer, there is in
that case an implied term or warranty that it shall be reasonably fit or the purpose to which it
is to be applied. In such a case, the buyer trusts the manufacturer or dealer, and relies upon
his judgement and not upon his own6 for the goods to be of Merchantable Quality7.

The plaintiff who bought hot water bottle from the chemist, the court held that it was very
much implied that he will use as a hot water bottle.8

5
Pollock & Mulla, ‘The Sale of Goods Act’, 2014, Ninth Edn. LexisNexis Butterworths Wadhwa, Nagpur
6
Jones v. Just (1868) LR 3 QB 197; Brown v. Edgington (1841) 2 Man & G 279, 58 RR 408; Spencer Trading
Co Ltd v. Devon [1947] 1 All ER 284
7
Laing v. Fidgeon (1815) 4 Camp 169, 16 RR 589; Shepherd v. Pybus (1842) 3 Man & G 868
8
Preist v. Last, (1903) 2 KB 148 (CA)
In the case of Thompson v. Sears9 and Bennett Ltd v. Kreeger10 it was held that goods
bought must be fit for the purpose for which is generally bought.

Woollen goods seller must know that underpants must know that they are required for the
particular purpose for being worn next to the skin.11 In a Sale of milk, it may be reasonably
inferred that the milk is being ordered for the purpose of being consumed.12

Where the plaintiff’s purchased a car from the defendant finance company supplied by motor
company and detected a defect, on the day when the car was to be delivered back it was held
that there is nothing that would cease the plaintiff to rely on the motor dealer’s skill and
judgement, it is very much anticipated that the defect would be removed.13

In the given set of facts, the plaintiff bought the buggy without making an enquiry about the
same and relied upon the seller’s skill and judgement regarding buying rather depending on
his own skill and judgement. It is very reasonable for the plaintiffs to have known the
ordinary and obvious use of the goods he is selling and the shortcomings while using the said
goods for that ordinary use.

The buyer buying the buggy, it was reasonable for seller that he may be using it for the very
ordinary use of travelling and bring it on the road.

A fraud has been committed on the part of the defendant who is seller in the present case, as
the fact was not revealed in the seller’s capacity during the purchase; it is certain that had the
usage of the buggy as a showpiece been revealed by the seller, there were chances on the part
of the buyer not purchasing it as matter fact that the goods would have not rendered fit for his
purpose.

Manufacturer is liable for the manufacturing defect in the wheels of the “buggy”

The plaintiffs had realized that the size of the hind wheels varied thinly and this was the
reason behind the buggy being shaky while on road. The petitioner later on ascertained that
the defect in the wheels were an outcome of manufacturing defect. The fact that the plaintiff
got injured after falling of the shaky buggy was very much evident that the buggy had the
defect which was brought up while the manufacturing process.
9
(1926)SC LT 221
10
(1925) 41 TLR 69
11
Lockett v. Charles Ltd; (1938) 4 All ER 170
12
Frost v. Aylesbury Diary Co.; (1905) 1 KB 608
13
R&B Customs Broker Co Ltd v. United Dominions Trust Ltd (1988) 1 All ER 847 (CA)
In the case of Abhaya Kumar panda v.Bajaj Auto Ltd14 the court held that

The manufacturers should not sell a product that suffers major defect and if the same has
been known to the consumers then it should be promptly withdrawn from the consumer or the
market.

The sub-axle balancing the rear wheels of an unloaded truck broke down after getting off-
road; the court held that sub axle won’t forge out of the steel billet by itself; certainly there
was a defect in the axle that was while manufacturing.15

The National Consumer Rights Redressal Commission in the case of Tata Motors v Rajesh
Tyagi, and HIM Motors Showroom16 held that it was the duty of both the manufacturer and
dealer to attend to the defect when a consumer complained of the defect in a vehicle and
make it defect-free and if they were not in position to do so, they should either refund the cost
of vehicle or provide a new vehicle to the consumer.

In the case of Hindustan Motors Ltd. vs. N. Siva Kumar17 it was held that when it became
impossible to replace the plaintiff’s defective vehicle, since the manufacturer had stopped
manufacturing the said model, this Court directed that the money along with interest,
compensation and costs were to be paid to the purchaser.

It is the duty of the manufacturer to ensure the vehicle to be free from any defects and to
make the vehicle roadworthy as held in the case of C.N.Anantharam vs M/S Fiat India
Ltd.& Ors.18

14
(1992) 1 CPJ 88 NC
15
K. Narayana v. P Venugopala Reddiar; AIR 1975 AP 84
16
(2014)CPJ132(NC)
17
(2000) 10 SCC 654
18
(2011) 1 SCC 460