Introduction

(a) The remedies: Roman tradition and natural law

If the object that has been sold and handed over to the purchaser subsequently turns out to suffer from a defect which diminishes its value for its ordinary use or for the use provided for in the contract, the purchaser, according to modern German law, has a choice between two remedies: he may demand annulment of the sale (with the result that the parties are obliged to return their mutual performances) or he can ask for a reduction of the purchase price.^{[1564] [1565] [1566] [1567] If a promised quality in the thing sold was absent at the time of the purchase, or if the seller has fraudulently concealed a defect, a third alternative is available to the purchaser; instead of cancellation or reduction, he may demand compensation for non-performance, i.e.}

These rules display quite a remarkable degree of traditionalism on the part of the fathers of the BGB; they have preserved all the essential elements of the Roman law relating to latent defects, as embodied in the Corpus Juris Civilis. Yet, the rules do not, I think, strike the unbiased reader as particularly simple or obvious solutions to the problem. They did, for instance, not commend themselves to those writers who wanted to get away from the idiosyncrasies of the ius positivum and who tried to create a system of law based on reason: the natural lawyers of the 17th and 18th centuries.⁷⁶ They proceeded from the basis of the objective equality of performances within a contract: "In contractibus natura aequalitatem imperat, et ita quidem ut ex inaequalitate jus oriatur minus habenti".

"dicitur accidens, quod eidem inhaeret et rem usui suo minus aptam redidit. Cum res ementur propter eum, quam habere debent usum, consequenter nemo res vitiosas emere velle praesumatur; vitia rei, quae in oculos non incurrunt, vel aliunde nota sunt, emtori indicare tenetur venditor... Et quia vitium rei aestimabile quid est, quatenus scilicet rem per sc ad aliquem usum aptam ineptam reddit; vitia pretium rei imminuunt, immo si quod vitium rem prorsus inutilem reddit, cam nullius pretii faciunt.... si res prorsus inutilis fuerit ob vitium latens, pretium emtori restituendum, si vero adhuc usum habere potest, aut alio modo damnum reparari, damnum saltern datum resarciendum. Haud difficulter patet, jura, quae tertius in re emta habet, vitiis annumeranda esse."

Defect in title and in quality are placed side by side.⁸⁰

(b) The implied conditions of the Sate of Goods Act

The Romanistic system of remedies for latent defects did not commend itself to the English courts and legislators either. As in the case of the seller's duty to pass a good title, the courts had started to provide some measure of implied protection.⁸¹ Today, however, the Sale of Goods Act imposes a series of graduated duties upon the seller. Where goods are sold by description, there is an implied condition that the goods correspond with their description.⁸² Under certain circumstances there is the further implied condition that the goods are merchantable;^[1569] and, finally, in still more limited circumstances, the condition that the goods are fit for a particular purpose is implied in the contract of sale.^[1570] In case of a breach of one of these conditions, the purchaser may repudiate the contract of sale, reject the goods and claim damages, or he may claim damages only.*^[1571] This intricate system of conditions, which frequently overlap in practice,^[1572] is certainly no less complicated than the corresponding rules of Roman law, but it is distinctly different.

(c) Caveat emptor

Caveat emptor is the principle governing the sale of goods in all early legal systems. The old German law has several proverbial sayings to that effect: "Augen auf, Kaufist Kauf, "Wer die Augen nicht auftut, der tue den Beutel auf, "Wer narrisch kauft, muss weislich bezahlen", etc.^{[1575] [1576] [1577] [1578] [1579] [1580] What all these maxims reflect is "Kauf vor Augen", a situation in which the contract of sale is concluded and executed at one and the same time, in the presence of both parties. The purchaser has the object of the sale "before his eyes" and it can therefore be expected of him to examine it properly before he concludes the bargain.99 After all: "ins vigilantibus scriptum"; as long as he can see what he buys and is able to satisfy himself of its quality, the Roman paterfamilias can be relied upon to look after his own interests and not, for instance, to pay the normal purchase price for a slave who is without one arm or leg.}

It is a harsh but healthy attitude of the law to prevent the purchaser from trying to go back on the terms of the contract under these circumstances. For if an object turns out to be defective, it is in any event always very difficult to prove that such a defect existed already at the time when the contract was concluded or when the object was transferred. There is often a strong possibility that the deterioration in quality might have taken place subsequently; that is why modern German law lays down very short prescription periods, which begin to run, not when the purchaser has (or could have) detected the defect, but from the time of delivery (transfer). However, what may have been an acceptable (if somewhat crude) policy in the small rural community of old, which knew only the executed sale, did not tie in with the refined standards of good faith which governed the classical, executory contract. As in the case of liability for eviction, the protection of the purchaser developed gradually and from a variety of roots.

2.