Sale of Goods Act, 1930: caveat emptor, rights of seller and buyer - Question Bank

1. The principle of 'caveat emptor' is best described as a defence for the seller against:
A) Fraudulent misrepresentation.
B) Breach of an express warranty.
C) Latent defects not discoverable by reasonable diligence.
D) Failure to disclose known defects.
2. If a buyer accepts goods that are not of merchantable quality, and the defect was not discoverable upon reasonable examination, the buyer can:
A) Still reject the goods.
B) Only claim damages for breach of warranty.
C) Not claim any remedy.
D) Return the goods only if the seller agrees.
3. Under the Sale of Goods Act, 1930, the buyer's right to repudiate the contract is generally available for:
A) Breach of warranty.
B) Breach of condition.
C) Minor deviations in quantity.
D) Late delivery of goods.
4. The right of resale by an unpaid seller is available only when:
A) The buyer has paid the full price.
B) The seller has not parted with the possession of the goods.
C) The property in the goods has not passed to the buyer.
D) The seller has a right of lien or stoppage in transit and has given notice to the buyer of his intention to resell.
5. If a seller sells goods as 'approximately 100 kg', and the actual weight is significantly less, the buyer's remedy is typically:
A) To reject the entire consignment.
B) To accept the goods and claim damages for the deficit.
C) To sue for specific performance of the exact weight.
D) To cancel the contract without recourse.
6. What is the main consequence of the seller's breach of the implied condition of title?
A) Buyer can only claim damages.
B) Buyer can reject the goods and claim damages.
C) Buyer must accept the goods and claim damages for breach of warranty.
D) The contract becomes voidable at the seller's option.
7. The Sale of Goods Act, 1930, specifies that the buyer must have a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract. This opportunity is:
A) A right that can be waived by the seller.
B) A condition precedent to the acceptance of goods.
C) A right that only applies to bulk goods.
D) A right that is lost if 'caveat emptor' is invoked.
8. If a contract for the sale of goods contains a condition, its breach entitles the aggrieved party to:
A) Claim damages only.
B) Repudiate the contract and claim damages.
C) Sue for specific performance.
D) Terminate the contract and retain the goods.
9. The right of the buyer to examine the goods is a crucial aspect of ensuring:
A) Compliance with the description.
B) Merchantable quality.
C) Fitness for a particular purpose.
D) All of the above.
10. Which of the following is a form of constructive delivery that terminates the seller's right of lien?
A) Seller giving a key to a warehouse where goods are stored.
B) Buyer taking physical possession of the goods.
C) Seller sending the goods via a common carrier.
D) Buyer paying the full price for the goods.
11. If a buyer purchases goods under a patent defect, 'caveat emptor' will apply unless:
A) The buyer is a minor.
B) The seller expressly warranted the goods.
C) The price paid is very high.
D) The defect is easily discoverable.
12. The right of stoppage in transit can be exercised by the unpaid seller:
A) Before the goods are delivered to the buyer.
B) After the buyer has taken possession of the goods.
C) Only if the buyer is solvent.
D) If the property in the goods has not passed to the buyer.
13. What is the primary remedy for the buyer if the seller delivers goods of inferior quality, contrary to an express warranty?
A) Return the goods and claim the full price.
B) Sue for damages for breach of warranty.
C) Rescind the contract and claim damages.
D) Compel the seller to replace the goods.
14. If a seller sells goods with a trade mark, there is an implied condition that:
A) The trade mark is merely for identification.
B) The trade mark is genuine and not counterfeit.
C) The trade mark is optional for the buyer.
D) The trade mark does not guarantee quality.
15. The doctrine of 'caveat venditor' (let the seller beware) is generally:
A) The prevailing principle in the Sale of Goods Act, 1930.
B) An exception to 'caveat emptor' in specific circumstances.
C) Replaced 'caveat emptor' entirely.
D) Not recognized under Indian contract law.
16. When is the implied condition of 'fitness for a particular purpose' applicable?
A) When the buyer relies on the seller's skill or judgment, and the seller is a dealer in goods of that description.
B) Always, regardless of the buyer's reliance.
C) Only when the goods are sold by description.
D) When the buyer specifically asks for the cheapest available option.
17. The Sale of Goods Act, 1930, implies a condition that the seller has a right to sell the goods. If this condition is breached, the buyer can:
A) Sue for damages only.
B) Reject the goods and claim damages.
C) Only sue for specific performance.
D) Not take any action as it's a matter of title.
18. What happens if the buyer accepts goods that do not conform to the contract, and the seller has committed a breach of condition?
A) The breach of condition is treated as a breach of warranty.
B) The buyer can still reject the goods.
C) The contract is automatically void.
D) The buyer loses all rights against the seller.
19. The buyer's right to sue for damages for breach of warranty is a right to:
A) Return the goods and get the refund.
B) Rescind the contract.
C) Recover the difference between the value of the goods as accepted and the value they would have had if they had fulfilled the warranty.
D) Demand specific performance.
20. If a seller delivers a larger quantity of goods than ordered, the buyer may:
A) Accept the whole lot.
B) Reject the whole lot.
C) Accept the ordered quantity and reject the rest.
D) All of the above, depending on the circumstances.
21. When goods are sold by description, and the goods delivered do not match the description, the buyer has the right to:
A) Accept the goods and claim damages.
B) Reject the goods and claim damages.
C) Reject the goods only.
D) Accept the goods only.
22. The buyer's right to examine the goods before acceptance is:
A) An absolute right, irrespective of the contract terms.
B) A right that can be excluded by a contract term.
C) Only applicable if the goods are delivered by installments.
D) Always waived if 'caveat emptor' applies.
23. If goods are sold by auction, the doctrine of 'caveat emptor' generally applies, but an exception exists if:
A) The auctioneer makes a false statement about the goods.
B) The buyer fails to inspect the goods.
C) The highest bid is not accepted.
D) The reserve price is not met.
24. Which of the following is NOT a condition for the seller to be considered an 'unpaid seller' under the Act?
A) The price of the goods or any part of the price has not been paid or tendered.
B) The seller has a right of lien or retention on the goods or some part of them.
C) The seller has obtained a decree for the price of the goods.
D) The bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has been broken by reason of the dishonour of the instrument.
25. Under the Sale of Goods Act, 1930, an unpaid seller's right of lien is terminated if:
A) The seller obtains judgment for the price of the goods.
B) The buyer obtains possession of the goods.
C) The seller delivers the goods to a carrier or bailee for transmission to the buyer.
D) The buyer becomes insolvent.
26. The right of 'stoppage in transit' ends when:
A) The carrier acknowledges holding the goods on behalf of the buyer.
B) The buyer wrongfully refuses to take delivery.
C) The carrier wrongfully refuses to deliver the goods to the buyer.
D) The goods are loaded onto the buyer's own ship.
27. If a seller sells goods by description, there is an implied condition that:
A) The goods will be of the lowest possible quality.
B) The goods will correspond with the description.
C) The goods will be free from any warranty.
D) The buyer must inspect the goods thoroughly.
28. The implied condition of fitness for a particular purpose is excluded under Section 16(2) of the Sale of Goods Act, 1930, if:
A) The buyer expressly relies on the seller's skill or judgment.
B) The seller is a dealer in goods of that description.
C) The buyer examines the goods and the defect should have been revealed by the examination.
D) The seller makes known the particular purpose for which the goods are required.
29. Which of the following situations would NOT be covered by the implied condition of merchantable quality?
A) A buyer purchases a second-hand car that is advertised as being in good working order, but it breaks down immediately.
B) A buyer purchases a suit of clothes that shrinks significantly after the first wash.
C) A buyer purchases a specific brand of tea that is known for its aroma, but the tea purchased has no aroma.
D) A buyer purchases a tool and it functions adequately for its intended common use, despite a minor cosmetic flaw.
30. The implied condition that the goods shall be of 'merchantable quality' means:
A) The goods are fit for any purpose the buyer might choose.
B) The goods are fit for the ordinary purpose for which such goods are used.
C) The goods are of the highest possible quality available in the market.
D) The goods are free from any patent defects.
31. When does the buyer's right to repudiate the contract arise under the Sale of Goods Act, 1930?
A) For breach of any warranty.
B) For breach of condition.
C) For breach of implied condition of title.
D) For wrongful rejection of goods.
32. In case of a breach of warranty by the seller, the buyer:
A) Can reject the goods.
B) Cannot reject the goods, but can sue for damages.
C) Can sue for the price.
D) Can claim specific performance.
33. The buyer's right to sue for damages for non-delivery of goods arises when:
A) The seller delivers the goods late.
B) The seller fails to deliver the goods as per the contract.
C) The buyer rejects the goods.
D) The property in the goods has passed to the buyer.
34. What is the buyer's primary right when the seller commits a breach of contract regarding the quality of goods?
A) Right to claim the price.
B) Right to reject the goods and claim damages.
C) Right to sell the goods.
D) Right to lien.
35. If a buyer wrongfully refuses to accept and pay for the goods, the seller's remedy is to:
A) Sue for specific performance.
B) Sue for damages for non-acceptance.
C) Take back the goods and retain the price.
D) Compel the buyer to accept the goods.
36. The buyer's right to reject goods arises when:
A) The seller tenders delivery of the goods.
B) The seller delivers fewer or more goods than contracted.
C) The buyer has accepted the goods.
D) The price of the goods has been paid.
37. Which of the following is a right of the buyer under the Sale of Goods Act, 1930?
A) Right to reject non-conforming goods.
B) Right to sue for damages for breach of warranty.
C) Right to recover the price paid for defective goods.
D) All of the above.
38. If an unpaid seller resells the goods, and the resale price is higher than the original contract price, the seller:
A) Must account for the surplus to the original buyer.
B) Can retain the surplus.
C) Must return the goods to the original buyer.
D) Cannot resell the goods.
39. An unpaid seller can exercise the right of resale under certain conditions. Which of the following is a key condition for resale?
A) The buyer must have paid the full price.
B) The goods must be perishable.
C) The seller must have exercised the right of lien or stoppage in transit.
D) The buyer must have expressly refused delivery.
40. Which of the following conditions must be met for an unpaid seller to exercise the right of stoppage in transit?
A) The buyer must not have become insolvent.
B) The goods must have reached the buyer's destination.
C) The seller must have parted with the possession of the goods.
D) The seller must have delivered the goods to a carrier for transmission to the buyer, and the buyer has not yet received them.
41. For the right of stoppage in transit to be exercised, the goods must be:
A) In the possession of the seller.
B) In the possession of the buyer.
C) In the course of transit between the seller and the buyer.
D) Destroyed during transit.
42. The right of stoppage in transit is available to an unpaid seller when:
A) The buyer has become insolvent.
B) The goods are still in the possession of the seller.
C) The buyer has paid part of the price.
D) The seller has waived the right of lien.
43. An unpaid seller's right of lien under the Sale of Goods Act, 1930, allows them to:
A) Withhold delivery of the goods.
B) Regain possession of the goods already delivered.
C) Sue for the price of goods.
D) Claim damages for breach of contract.
44. Which of the following is a right available to an unpaid seller when the property in the goods has passed to the buyer, but the price has not been paid?
A) Right of lien
B) Right of stoppage in transit
C) Right of resale
D) All of the above
45. What is the primary right of a seller of goods under the Sale of Goods Act, 1930, when the property in the goods has passed to the buyer?
A) The right to reclaim the goods.
B) The right to sue the buyer for damages for non-acceptance.
C) The right to sell the goods to another party immediately.
D) The right to cancel the contract.
46. If a buyer purchases goods without inspecting them, relying solely on the seller's description, and the goods turn out to be defective, the principle of 'caveat emptor' will generally:
A) Still apply, and the buyer bears the loss.
B) Not apply due to the seller's description.
C) Be modified by the implied condition of merchantable quality.
D) Lead to a breach of implied warranty of title.
47. The doctrine of 'caveat emptor' is subject to certain exceptions under the Sale of Goods Act, 1930. Which of the following is NOT an exception?
A) Where the seller makes a fraudulent misrepresentation.
B) Where the goods are sold by description and are not of merchantable quality.
C) Where the buyer expressly waives the right to inspect the goods.
D) Where the seller, expressly or by implication, makes known to the buyer the particular purpose for which the goods are required and the buyer relies on the seller's skill or judgment.
48. Which section of the Sale of Goods Act, 1930, primarily deals with the implied condition as to the quality or fitness of goods?
A) Section 14
B) Section 15
C) Section 16
D) Section 17
49. Under the Sale of Goods Act, 1930, the doctrine of 'caveat emptor' is generally applicable, meaning:
A) Let the seller beware.
B) Let the buyer beware.
C) Let the contract be void.
D) Let the goods be destroyed.
50. What is the fundamental principle of 'caveat emptor' in the context of the Sale of Goods Act, 1930?
A) The seller must ensure the goods are fit for the buyer's purpose.
B) The buyer must exercise reasonable care and skill to inspect the goods before purchase.
C) The goods are deemed to be of satisfactory quality by default.
D) The seller is liable for all defects in the goods sold.
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