Caveat Emptor

Meaning

Caveat emptor a Latin phrase is often used as a disclaimer in a contract. It is also used as an English proverb that says, “let the buyer beware.” Under many jurisdictions this maxim of contract law acts as a burned over the buyer as it demands an investigation before making a purchase. This maxim demands the satisfaction of buyer with the product’s suitability so that the chances of rejection of certain product can be reduced.

History

Origin of caveat emptor can be seen in a case of 1603 in England, Chandelor vs. Lopus. A bezoar stone worth 100 euros was believed to have healing properties. The buyer later realized that the stone had no such properties and later sued the seller. In this case court made a statement that, “the bare affirmation that it was a bezoar stone, without warranting it to be, is no cause of action.” This statement meant that, ‘no guarantee was given by the seller that the stone which was bought is bezoar stone.’
The treatment of buyers by the common law in 19^th century can be seen by the maxim Caveat emptor which means buyers beware. This maxim says that the purchaser should examine and judge the product carefully so that the risk of getting bad quality and unsatisfactory results can be avoided, getting a warranty is also recommended. Initial when the rule was originated it was very rigid and scope of any subsequent change was not available. There is minimal requirement from the seller’s side for the disclosure of the product according to English Sale of Goods act, 1893. Seller is not bounded to disclose about the properties and durability of the product to the buyer. The concepts like ‘fitness of goods’ and ‘merchantability’ were not known, I was the buyer’s duty to enquire about the product.

Definition

Caveat emptor is a maxim of contract law which puts all the burden on the buyer so that he can go through the details before making a purchase. Maxim caveat emptor is a important part of Sales of Goods Act, 1930, as it ensures that the buyer is in the full control of the decision he is taking.

There is no indirect guarantee of any sort or restriction on the nature of or durability of any good sold within any contract, under section 16 of sale of goods act, 1930. By this we can understand that the buyer has to be aware and well-versed before the consumption of any good. It is his duty to know about the price, durability, utility of the article he is purchasing because if any fault occurs retailer is not responsible for it.

Caveat emptor is a fundamental principle in contractual relationship between buyer and seller. A commercial contract involves two parties a buyer and a seller and both are bounded to respect and follow each other’s rights and interests.

For instance, if A wants to buy a car from B, under the caveat emptor principle, A is responsible for gathering the relevant information about the car, for the information A can question B about the car before making a purchase. If A makes least efforts to gain information about it and purchases the car and it breakdown soon after the purchase, B is technically not liable for any damage under the maxim caveat emptor. But if B lied while giving the information to A, B will be held liable for fraud and be entitled to damages.