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''Caveat emptor'' (; from ''caveat'', "may they beware", a
subjunctive The subjunctive is a grammatical mood In linguistics Linguistics is the scientific study of language A language is a structured system of communication used by humans, including speech (spoken language), gestures (Signed language, ...
form of ''cavēre'', "to beware" + ''ēmptor'', "buyer") is
Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the Roman Republic, it became ...

Latin
for "Let the buyer beware". It has become a
proverb A proverb (from la, proverbium) is a simple and insightful, traditional saying A saying is any concisely written or spoken expression (linguistics), expression that is especially memorable because of its meaning or style. Sayings are categorize ...

proverb
in English. Generally, ''caveat emptor'' is the
contract law A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview ...
principle A principle is a proposition or value that is a guide for behavior or evaluation. In law, it is a Legal rule, rule that has to be or usually is to be followed. It can be desirably followed, or it can be an inevitable consequence of something, suc ...
that controls the sale of
real property In English English usually refers to: * English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon England, early medieval England, which has eventually become the World la ...
after the date of closing, but may also apply to sales of other goods. The phrase ''caveat emptor'' and its use as a disclaimer of warranties arise from the fact that buyers typically have less information than the seller about the good or service they are purchasing. This quality of the situation is known as '
information asymmetry In contract theory In economics, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of information asymmetry. Because of its connections with both agency (law), agency and incentiv ...
'. Defects in the good or service may be hidden from the buyer, and only known to the seller. It is a short form of ''Caveat emptor, quia ignorare non debuit quod jus alienum emit'' ("Let a purchaser beware, for he ought not to be ignorant of the nature of the property which he is buying from another party.") I.e. the buyer should assure himself that the product is good and that the seller had the right to sell it, as opposed to receiving stolen property. A common way that information asymmetry between seller and buyer has been addressed is through a legally binding
warranty In contract A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO Phot ...
, such as a guarantee of satisfaction.


Explanation

Under the
principle A principle is a proposition or value that is a guide for behavior or evaluation. In law, it is a Legal rule, rule that has to be or usually is to be followed. It can be desirably followed, or it can be an inevitable consequence of something, suc ...

principle
of ''caveat emptor'', the
buyer Procurement is the process of finding and agreeing to terms, and acquiring goods In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in bo ...
could not recover damages from the
seller Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. The seller, or the provider of the goods or services, completes a sale in ...

seller
for defects on the
property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects or otherwise made material misrepresentations amounting to
fraud In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by ...

fraud
. Before
statutory law Statutory law or statute law is written law passed by a body of legislature. This is as opposed to Oral law, oral or customary law; or regulatory law promulgated by the Executive (government), executive or common law of the judiciary. Statutes may ...
, the buyer had no express
warranty In contract A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO Phot ...
ensuring the quality of goods. In the UK,
common law In law, common law (also known as judicial precedent or judge-made law, or case law Case law is the collection of past legal decisions written by courts and similar tribunal A tribunal, generally, is any person or institution with authority ...
requires that goods must be "fit for the particular purpose" and of "merchantable quality", per Section 15 of the
Sale of Goods Act Sale of Goods Act (with its variations) regulates the sale of goods law in Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirtee ...
but this
implied warranty In common law In law, common law (also known as judicial precedent or judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions. ''Black's Law Dictionary ...
can be difficult to enforce and may not apply to all products. Hence, buyers are still advised to be cautious.


United States


Real estate

The modern trend in the U.S. is that the implied warranty of fitness for a particular purpose applies in the real-estate context to only the sale of new residential
housing Housing, or more generally living spaces, refers to the construction Construction is a general term meaning the and to form , , or ,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) ...

housing
by a builder-seller and that the ''caveat emptor'' rule applies to all other real-estate sale situations (e.g. homeowner to buyer). Other jurisdictions have provisions similar to this.


Chattel property

Under Article 2 of the
Uniform Commercial Code The Uniform Commercial Code (UCC), first published in 1952, is one of a number of Uniform Act In the United States The United States of America (USA), commonly known as the United States (U.S. or US), or America, is a country Contiguous ...

Uniform Commercial Code
, the sale of new goods is governed by the "perfect-tender" rule unless the parties to the sale expressly agree in advance to terms equivalent to ''caveat emptor'' (such as describing the goods as sold "as is" and/or "with all faults") or other limitations such as the below-discussed limitations on remedies. The perfect-tender rule states that if a buyer who inspects new goods with reasonable promptness discovers them to be "nonconforming" (failing to meet the description provided or any other standards reasonably expectable by a buyer in his/her situation) and does not use the goods or take other actions constituting acceptance of them, the buyer may promptly return or refuse to accept ("reject") them and demand that the defect be remedied ("cured"). When goods fitting the same description and expectations are available for sale (''e.g.'', when the vendor has other instances of the same mass-produced merchandise in stock inventory), either the vendor or the buyer may insist on an "even exchange" for other, "conforming" instances of the product. When conforming goods are not available in stock but are available for the dealer to purchase (usually on the open or "spot" market), the buyer may require that the seller obtain the goods elsewhere, even at a higher price, with the seller having to incur a loss equivalent to the price difference. If the vendor still does not or cannot provide the goods and the dispute proceeds to litigation (as opposed to renegotiation or settlement), then as in all cases of vendor breaches of contract, the buyer may recover only the damages that s/he would have suffered had s/he taken all feasible steps to minimize ("mitigate") his/her damages suffered. As a default rule, the perfect-tender rule may be "contracted around" in ways that specify or limit a buyer's remedies (and that accordingly reduce the market price that rational buyers are willing to pay for the goods). In many cases, the
vendor In a supply chain In commerce, a supply chain is a system of organizations, people, activities, information, and resources involved in supplying a product (business), product or service (business), service to a consumer. Supply chain activities ...

vendor
will not provide a refund but will provide store credit. In the cases of
software Software is a collection of instructions Instruction or instructions may refer to: Computing * Instruction, one operation of a processor within a computer architecture instruction set * Computer program, a collection of instructions Music * I ...

software
,
movies A film, also called a movie, motion picture or moving picture, is a work of used to simulate experiences that communicate ideas, stories, perceptions, feelings, beauty, or atmosphere through the use of moving images. These images are gen ...

movies
, and other
copyright Copyright is a type of intellectual property Intellectual property (IP) is a category of property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. ...

copyright
ed material, many vendors will offer only a direct exchange for another copy of the same title, with the effect that the initial transfer or license of intellectual-property rights is preserved. Most stores require
proof of purchase Proof of purchase is often required for sales promotion Sales promotion is one of the elements of the promotional mix. The primary elements in the promotional mix are advertising, sales, personal selling, direct marketing and publicity/public rel ...
and impose time limits on exchanges or refunds. Some larger
chain stores A chain store or retail chain is a retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distributi ...
, such as
F.Y.E. 2428392, Inc. (doing business as A trade name, trading name, or business name is a pseudonym A pseudonym () (originally: ψευδώνυμος in Greek) or alias () is a fictitious name that a person or group assumes for a particular purp ...
, Staples,
Target TARGET2 (Trans-European Automated Real-time Gross Settlement Express Transfer System) is the real-time gross settlement Real-time gross settlement (RTGS) systems are specialist Electronic funds transfer, funds transfer systems where the transfer ...
, or
Walmart Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational Retail companies, retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United ...

Walmart
, will, however, do exchanges or refunds at any time, with or without proof of purchase, although they usually require a form of picture identification and place per-transaction and/or per-person quantity or dollar limitations on such returns.


United Kingdom

In the UK, consumer law has moved away from the ''caveat emptor'' model, with laws passed that have enhanced
consumer rights Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent businesses ...
and allow greater leeway to return goods that do not meet legal standards of acceptance. Consumer purchases are regulated by the
Consumer Rights Act 2015 The Consumer Rights Act 2015 is an Act of Parliament of the United Kingdom The Parliament of the United Kingdom is the Parliamentary sovereignty in the United Kingdom, supreme Legislature, legislative body of the United Kingdom, the Crow ...
, whilst business-to-business purchases are regulated by the
Sale of Goods Act 1979 The Sale of Goods Act 1979c 54 is an Act of the Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body A legislature is an assembly Assembly may refer to: Organisations and meetings * ...
. In the UK, consumers have the right to a full refund for faulty goods. However, traditionally, many retailers allow customers to return goods within a specified period (typically two weeks to two months) for a full refund or an exchange, even if there is no fault with the product. Exceptions may apply for goods sold as damaged or to clear. Goods bought through "distance selling," for example online or by phone, also have a statutory "cooling off" period of fourteen calendar days during which the purchase contract can be cancelled and treated as if not done. Although no longer applied in consumer law, the principle of ''caveat emptor'' is generally held to apply to transactions between businesses unless it can be shown that the seller had a clear information advantage over the buyer that could not have been removed by carrying out reasonable
due diligence Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care Standard may re ...
.


Variations


''Caveat venditor''

''Caveat venditor'' is
Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the Roman Republic, it became ...

Latin
for "let the seller beware." In the landmark case of '' MacPherson v. Buick Motor Co.'' (1916), New York Court Appeals Judge
Benjamin N. Cardozo Benjamin Nathan Cardozo (May 24, 1870 – July 9, 1938) was an American lawyer and jurist A jurist is a person with expert knowledge of law; someone who analyses and comments on law. This person is usually a specialist legal scholarnot neces ...

Benjamin N. Cardozo
established that privity of duty is no longer required in regard to a lawsuit for
product liability Product liability is the area of law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its envir ...
against the seller. This case is widely regarded as the origin of ''caveat venditor'' as it pertains to modern
tort A tort, in common law In law, common law (also known as judicial precedent or judge-made law, or ) is the body of law created by judges and similar quasi-judicial by virtue of being stated in written opinions. ' is the most-used legal dict ...

tort
law in US.


''Caveat lector''

''Caveat lector'' is a Latin phrase meaning "let the reader beware". It means that when reading something, the reader should take careful note of the contents, and undertake due diligence on whether the contents is accurate, relevant, reliable and so forth. Another variant is ''Caveat Auditor'', or "let the listener beware", where caution is urged regarding all messages, in particular spoken messages, such as a radio advertisement.


See also

*
List of Latin phrases __NOTOC__ This is a list of Wikipedia articles of Latin phrases and their translation into English. To view all phrases on a single, lengthy document, see: * List of Latin phrases (full) This article lists direct English translations of common La ...
*''
Chandelor v Lopus ''Chandelor v Lopus'' (1603) 79 ER 3 is a famous case in the common law of England. It stands for the distinction between warranties and mere affirmations and announced the rule of ''caveat emptor'' (buyer beware). Facts A man paid £100 for wha ...
'' *
As is As is, when employed as a term with legal Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by i ...


Notes


Sources

*Hamilton, W.H. "The Ancient Maxim ''Caveat Emptor''" (1931) 40 ''Yale Law Journal'' 1133, argues that ''caveat emptor'' never had any place in Roman law, civil law, or ''
lex mercatoria ''Lex mercatoria'' (from the Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power ...
'' and was probably a mistake when implemented into the common law. Rather, there was a duty of
good faith Good faith ( la, bona fides), in human interactions, is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. While some Latin phrases have lost their literal meaning over centuries, this is not the cas ...
.
''MacPherson v. Buick Motor Company'' (Opinion of the Court)


External links

* {{Cite Americana, wstitle=Caveat Emptor , short=x
From Caveat Emptor to Caveat Venditor - a Brief History of English Sale of Goods Law
Latin words and phrases Latin legal terminology Legal doctrines and principles