The choice for defect.

If one buys something and later finds it defective he has the choice to annul the contract, return the goods or approve the contract. If it is not possible to return the goods he may keep them and demand compensation. In all cases this rule is equally applicable to both the seller and buyer.

CR (151) This choice is considered as annulled when a party makes it a binding contract. One indication of such decision is using the goods as such that reveals one's intention not to dismiss the contract.

EXAMPLES WHEREIN ONE CAN LAWFULLY DEMAND COMPENSATION. In the following cases it is not lawful to annul the contract but the only choice is to demand for compensation for the defective goods.

1. When the goods are destroyed.

2. When the goods are not available like when they are sold or given to some one. 3. When goods are used and changes have been made in them, like cutting the fabric, dyeing or sewing it, etc.

4. Using goods in a formal way like renting or mortgaging.

5. Causing some defect in goods after receiving delivery of the same from the seller. In all of these cases a party is not allowed to annul the contract and return goods. In the case of defective goods, one is entitled only to demand compensation because of defect, if he desires.

If a defect takes place in goods during the time when some other form of the right to have the choice to annul a contract is effective like the choice in Section 2; a party is allowed to return goods.

CR (152) No compensation is payable with the choice to return goods when the defect does not affect the value and fair market price of a piece of goods. If a finalized contract falls under the deals involving RIBA like selling wheat for wheat or gold for gold but later some defect is discovered in one side of the deal, it is said that it is not lawful to demand compensation because 'RIBA' (unlawful interest) but according to the strong view demand for compensation is lawful. The right to demand compensation and returning goods will not exist because of two reasons:

1. If one has full knowledge of the defect before the contract.

2. Relieving the seller of all responsibilities regarding the appearance of some defect in goods after concluding the contract, namely that the buyer will not demand compensation or return goods if a defect will be discovered in goods.

CR (153) According to the strong view this right also does not become effective immediately.

CR (154) Defect means what is not natural like blindness, deafness dumbness etc., or something extra like extra finger, etc. If defects other than the above ones it is difficult to prove the right to demand compensation although it is more clear that such right can be proved in the latter case too.

CR (155) If a defect is existing in most pieces of the category of a given goods according to the more clear view, rules of defect will not apply in this case.

CR (156) For the existence of defect it is not a condition that its presence should affect the cost or value. For such defect one is not entitled to demand compensation as mentioned before.

CR (157) Just as a defect which is present in goods during forming of the contract give a party the choice to annul the contract in the same way a defect which may come into existence after the formation of the contract and before delivery, thus, it is lawful to return the goods because of the defect. However, a demand for the deference between the defective and not defective goods is objectionable.

However, about the lawfulness of demand for compensation there are two views and the more clear one is no compensation if the defect is not due to buyer's deeds.

CR (158) The right of having the choice to annul the contract or ask for compensation because of defect can come into effect in case of defects like insanity and leprosy etc., such defect comes into existence within a year after the formation of contract.

CR (159) The compensation could be adjusted in the following ways: The goods are priced as if they had no defects and then as if they were defective to find out the difference which is the amount to be paid as compensation. If goods are priced for $8.00 as without defect and for $4.00 as defective and if the agreed price is $4.00 the agreed price should be cut in half which in this case is $2.00 and so on. The pricing of goods as defective should be done by an expert who is reliable and trustworthy.

CR (160) If the experts differ in pricing in some cases there is a solution like the case where there is a common factor among prices such as if one party prices a piece of goods $8.00 and $6.00 respectively in both cases the difference is by half the compensation and half of the agreed price, but if the difference does not have any such common factors like one party prices $8.00 and $4.00 as defective and the other party prices $8.00 and $6.00 as defective about such case, there are several views and situations. According to the rules the expert's decision must be adopted in a precautionary way until a mutual agreement is reached.

CR (161) If one buys two pieces of goods for two different prices in a lump sum deal and then a defect is discovered in one of them, he will have the choice to return the defective one. If he did, the seller has the choice to annul the contract of goods without defect, the same rule applies when one buys two different objects for one price, he is not allowed to return only the defective one, he must return both if he chooses to annul the contract.

CR (162) If two people buy one piece of goods and find them defective one of them may choose to annul the contract for his share and it gives the seller the choice to annul the contact as a whole.