What Is Caveat Emptor?

This Latin phrase is usually applied to the purchase and possession of property. It means “buyer beware.” In legal use, caveat emptor is applied to real estate transactions, generally after the property has been formally transferred from one owner to another.

Real estate and legal definitions in various publications agree that caveat emptor prevents the buyer from obtaining financial “recovery” because of defects that might make the property unfit for occupation. A legal exception is made if the person selling the property has consciously withheld information or covered up the defects in order to move the sale forward.

In recent years, real property sales in the United States have been governed by what some call an “implied” warranty. However this is usually reserved for the sale of new houses and involves the builder as well as the seller. Caveat emptor is generally applied when the transfer of property is between two private individuals, one of whom is the owner of the home and the other is the individual buyer.

Some people in the legal and real estate fields assume a warranty on property and other items. But cases in variations jurisdictions have uncovered some problems with warranty enforcement. This brings in the informal caution: the buyer should beware of possible defects and problems when making a purchase because the seller may not be liable under law.

While it has been widely applied to sales of real property, caveat emptor might also be involved in the sale of commercial items and store merchandise. The seller does not, in most cases, have to give the buyer a money refund or substitute another item in exchange.

Many will simply give the customer credit in the amount charged for the original item. The process varies depending on which legal jurisdiction covers the location.

The first use of caveat emptor in United States law is believed to have occurred in the early 1800s. Over the next two centuries the application of the concept has been changed and reinterpreted. In comparison, many jurisdictions in England have specific laws to deal with post-sale problems and defects.

In one interesting use of the term “caveat emptor,” travel agents, group guides and others use the term to help their clients avoid buying property or merchandise from certain areas or businesses known to offer items that are not fit for use or occupation.

A related legal concept, “caveat venditor” refers to the person selling the property or merchandise. For example, the seller might have acquired the property or merchandise believing that it is free of defects or problems, but the ultimate buyer might uncover something that makes the property unusable. Therefore, with caveat venditor, the seller has to take care when acting as the “middle-man” in a transaction.

This could be very important to someone considering the purchase of real estate in a foreign country or to someone who is buying collectibles and valuable items. The legal concept may also apply to items purchased in another country that will not be allowed through the customs checkpoints.

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