Caveat emptor can be defined as a rule or principle that when a person is buying something, he is responsible for the condition of the product, and the seller should not be held accountable if it does not meet the expectations of the seller. A
There are several terms in business that have great significance in business, sales, and marketing, but many people are not aware of the meaning of these terms. They usually leave them as considering them the phrases of foreign language and don’t realize their importance until something happens. Similarly, the phrase “Caveat emptor” is also a relevant term in the marketing and sales world.
Read this article to learn about the term caveat emptor and what is the meaning of “caveat emptor.”
What is Caveat Emptor?
The phrase “caveat emptor” is created by combining Latin language words “Caveat” and “emptor”. The meaning of “caveat” is “may he beware,” and the definition of “emptor” is the buyer. Therefore, the exact meaning of the phrase “caveat emptor” is “Let the buyer beware”.
The purpose of this phrase is quite simple. By putting the “caveat emptor” phrase in the contract, the sellers declare that the buyer is aware of everything related to the product that is sold to him, and in this way, he avoids the occurrence of future disputes with the buyer.
It is assumed that the buyer is aware of the risk involved in the transaction. Therefore, the caveat emptor makes it necessary for a buyer to test the qualities and condition of the product before making a final purchase. For example, a buyer buys a glass water bottle and later found that the bottle has a crack on it. But because of the “caveat emptor” principle, the buyer will be stuck with the defective product, and the seller held no responsibility for it because it was the responsibility of the buyer to check the condition and quality of the bottle before making the final purchase.
Caveat emptor holds an essential place in the real estate transactions. For example, in the USA, the real estate agent is required to provide implied warranty of fitness to a buyer who bought a new property, and the caveat emptor rule is applied on all the transactions taking place in real estate to avoid any fraud situations. Therefore, in the case of new properties, the seller will be considered liable if there is any fault in the property.
On the other hand, in the case of old properties, the buyer should make a thorough check-up of the property, and he should be “beware” before making the final purchase.
Exceptions of Caveat emptor
1. Products bought under the brand’s name
When a buyer buys goods or products under the name of a brand, then the seller of the product can be held responsible if the product does not fulfill the requirement of the buyers or in case of poor quality of the product.
There are no direct conditions that imply that the product will fit the needs of customers for which he bought the product.
2. Fitness of goods for buyers’ purpose
When a buyer tells about his requirements for a product. He depends on the judgment and suggestion of the seller to choose the product to fulfill his needs. Then it becomes the responsibility of the seller to suggest the right product to satisfy their desired usage.
For example, when a person goes to a shop to buy a bag for trekking purposes and the bag which can be used in poor weather conditions like rain and snowfall, etc. In such a situation, if the seller sells a bag that does not meet the requirements of the buyer, then the seller would be held responsible for it.3.
3. Fraud or misinterpretation by the seller:
If a seller gets the consent of the buyer by fraud or he hides the fault in the product, which is discovered by the seller at closer inspection, then the caveat emptor will not be applied. In both cases, the seller will be held responsible for the fraud.
4. Sales by sample or by description
If a seller sells his products by providing samples or by making use of description, then the seller will be held responsible, and caveat emptor will not be applied in case the product does not match the sample or description provided.
For example, you buy a packet of green tea after trying and tasting the sample provided by the seller. But if the product purchased doesn’t match the flavor of the sample, then the caveat emptor will become invalid, and the seller will be considered responsible for the fraud.
5. Goods of merchantable quality
According to law, a seller should sell the goods that are of merchantable quality. That means the goods should meet the standards of markets. If the product sold by the seller does not match the market standards, then the caveat emptor will not be applicable, and the seller would be required to take responsibility.
6. Usage of trade
If the seller doesn’t inform the buyer about the warranty conditions or fitness of the product, then the rule of caveat emptor ceases to apply, and the seller will be held responsible in this condition.
For example, if you bought some antique stuff of an old and famous ship, but the seller did not mention that the thing was damaged by seawater, then the caveat emptor cease to become valid, and the seller will be held responsible for the fraud.
Caveat emptor is the law of the past. Caveat venditor is a new term that has not entirely replaced but is quite frequently used in market places. The meaning of caveat venditor is “let the seller beware”. After the industrial revolution, the sellers became more integrate towards the goods they sell and the quality of the products. All the sellers take responsibility for the goods that they sell.
In the present times, most sales made fall under caveat venditor. That means an implied warranty of merchantability covers the goods sold. That means the products sold by sellers are intend to fulfill the purpose for which a buyer bought that product.