Caveat Emptor

The word Caveat Emptor is derived from Latin term that means “let the buyer beware. Like the phrase “sold as is”, this term means that the buyer presumes the risk that the product might not meet its expectation and fail or have defects. In short, the term Caveat Emptor means that the sellers have no obligation towards buyers if product does not meet their expectation[1]. In expression Caveat Emptor’usually finds a place in laws related to business. The maxim of caveat emptor is enshrined in Section 16 of the Sale of Goods Act, 1930. This maxim of caveat emptor is based on the fundamental principle that once a buyer is satisfied with the product’s suitability, then he has no right to reject such product or return it. The aim of introducing this provision was to make sure that the buyer purchases the product at his own risk and judgement after being assured of the quality of the product. Except in cases of fraud where the doctrine of caveat emptor cannot be applied.[2]

Section 16 of the Sale of Goods Act 1930 mentions that the principle of caveat emptor which reads as-Subject to the provisions of this act or any other law for the time being in force there is no implied condition or warranty as to quality or fitness for any particular purpose of goods supplied.”

The caveat emptor principle, that literally means let the buyer beware, has been followed for many years by the Courts of England. A lot of cases in medieval times were decided by the rules of the lex mercatoria (law merchant) in special courts. The origin of the term Caveat Emptor could be traced in both Roman law and Germanic law. They both permitted buyer to be parted from his/her money for inferior goods with almost no protection and with very little inspection and express contractual guarantees the buyer had the foresight to insist upon. The development of the warranty of quality was a step forward as a measure taken for protection for the unwary buyer that corrects the worst access of caveat emptor by holding the seller liable for the quality standards matching the expectation of buyers.[3] As mentioned a lot of cases in medieval times were decided by the rules of the lex mercatoria  (law merchant) in special courts, but for other than the basic rights such as the right of the seller to payment and the right of the buyer to the goods, private law was not very interested. As a matter of fact, the criminal law and statutes that prohibited the use of false measures and the adulteration of food, beer, and wine, regulated a major part of claims about the sale of goods and there were local policies regulating the trade fairs that changed from place to place[4]. As one would trace by its origin, the study behind the rule of caveat emptor was basically the dependence placed by the buyer on his own skill or judgment. It is based on the idea that once a buyer satisfies himself as to the rightness of the product for his use, he would subsequently have no right to reject the same. The rule of caveat emptor, as it existed at the times of its origin, was quite rigid.[5]

EXAMPLE:

  1. Under the principle of caveat emptor, for example, a consumer who purchases a soup bowl and later discovers that it has a leak and is defective product. Had they inspected the bowl prior to the sale, they may have changed their mind.
  2. A truck transaction between two private parties (as opposed to a dealership, in which the sale is subject to an implied warranty). The buyer must take on the responsibility of thoroughly inspecting and researching the truck—perhaps taking truck to a mechanic for a closer look—before finalizing the sale. If something comes up after the sale, maybe a transmission failure, it is not the seller’s responsibility. Garage sales offer another example of caveat emptor, in which all sales are final, and nothing is guaranteed. 

The case that clearly illustrates the situation up to seventeenth century is Chandelor v. Lopus [6]in which the plaintiff brought an action against the defendant for the selling of a Bezoar Stone. This particular stone, found in the stomach of some animals, was supposed to have medicinal properties. The majority of the court held that the evidence was insufficient to find the defendant liable because of the absence of any written warranty.

Nowadays we luckily don’t follow the maxim of Caveat Emptor, but rather Caveat Venditor, that is directed towards a new Consumer Protection System and more consumer-oriented market wherein commercial transactions are being encouraged.  Such a change will not only balance between rights and obligations of the seller and the buyer.


[1] https://www.findlaw.com/consumer/consumer-transactions/what-does-caveat-emptor-mean-.html#:~:text=Caveat%20emptor%20is%20a%20Latin,meet%20expectations%20or%20have%20defects

[2]https://blog.ipleaders.in/exceptions-rule-caveat-emptor/

[3] John c. Reitz A history of cut-off rules as a form of caveat emptor: Part I the 1980 US convention on the international sale of goods pg. 437, https://academic.oup.com/ajcl/article-abstract/36/3/437/2580805

[4] https://www.mondaq.com/italy/arbitration-dispute-resolution/40206/from-caveat-emptor-to-caveat-venditor–a-brief-history-of-english-sale-of-goods-law#:~:text=The%20caveat%20emptor%20principle%2C%20that,by%20the%20Courts%20of%20England.&text=The%20principle%20of%20caveat%20emptor,the%20cost%20of%20his%20inattention.

[5]http://www.legalserviceindia.com/articles/caveat1.htm#:~:text=II.&text=As%20one%20would%20trace%20by,his%20own%20skill%20or%20judgment%20.&text=Buyer’s%20examination%20of%20the%20goods,the%20seller%20to%20provide%20information.

[6] Chandelor v. Lopus (1603) Cro Jac 4.

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