Caveat Emptor

Caveat Emptor

Caveat Emptor (Latin, “let the buyer beware”), principle applied in early common law that the buyer of defective goods could not hold the seller legally responsible. The theory of the early common law was based on the assumption that the buyer was able to examine the goods for any obvious defects, and that if the goods had latent defects of which the seller was unaware the buyer should bear the loss. Under modern law, however, the rule of caveat emptor does not apply to the sale of goods. The rule instead is that the seller is deemed to make an implied warranty that the goods are reasonably fit for the purpose intended by the buyer. Goods that are defective may be sold without legal liability if the fact is brought to the attention of the buyer. The rule of caveat emptor is sometimes used in modern law in reference to a real estate sale in which the seller does not specifically state that the title to the real estate is clear. In such sales, which usually are conducted under supervision of a court in bankruptcy or mortgage foreclosure, or in other judicial proceedings, the buyer takes the risk of acquiring a defective title. (1)

Caveat Emptor in International Trade

Meaning of Caveat Emptor, according to the Dictionary of International Trade (Global Negotiator): Expression that means “let the buyer beware”. The buyer accepts the goods “as is” and the risk they may be defective or unsuitable. The buyer purchases at their own risk.

Caveat Emptor, Qui Ignorare Non Debuit Quod Jus Alienum Emit

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See Also

• Warning

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Notes and References

1. Encarta Online Encyclopedia

See Also

Definition of Caveat Emptor

In accordance with the work A Dictionary of Law, this is a description of Caveat Emptor : (Latin: let the buyer beware)

A common-law maxim warning a purchaser that he could not claim that his purchases were defective unless he protected himself by obtaining express guarantees from the vendor. The maxim has been modified by statute: under the Sale of Goods Act 1979 (a consolidating statute), contracts for the sale of goods have implied terms requiring the goods to correspond with their description and any sample and, if they are sold in the course of a business, to be of satisfactory quality and fit for any purpose made known to the seller. Each of these implied terms is a condition of the contract. However, in most commercial contracts the implied terms are excluded. This will usually be valid unless the exclusion is unreasonable or unfair under the law relating to unfair contract terms. These statutory conditions do not apply to sales of land, to which the maxim caveat emptor still applies as far as the condition of the property is concerned. However, a term is normally implied that the vendor must convey a good *title to the land, free from encumbrances that were not disclosed to the purchaser before the contract was made.