Caveat Emptor

Caveat Emptor: Being a Careful Customer

Caveat emptor, which is Latin for “let the buyer beware” is the idea that a buyer should be responsible for reasonably examining an item before choosing to buy it. By doing so, the buyer is responsible for the condition of the product. This is often applied to items that are not covered by a strict warranty. In the United States, caveat emptor is most often used for fitness type of implied warranties.

An implied warranty of fitness does not require a seller to be a merchant of physical goods, but rather he must simply possess knowledge and expertise that the buyer can use. In the Uniform Commercial Code it specifically states that when a buyer is relying on a seller’s knowledge and skill to purchase the correct item, there is an implied warranty that whatever goods are being sold will be useful. Caveat emptor does apply to this warranty.

Not only is caveat emptor applied to an implied warranty of fitness, it is also often done with purchasing merchandise. In most circumstances, a seller is not required to allow have a return policy. Here caveat emptor is applied. The customer has the responsibility to inspect the quality of the product. If the customer finds a problem with the product, the store is not liable for this.

While the law does support caveat emptor most stores do provide some sort of return policy, whether it is a refund, exchange or credit. Most of these situations require a receipt or proof of purchase or when without it, a photo ID.

Caveat emptor was first established In American law by the precedent of Laidlaw v. Organ (1817). In this case, Organ bought tobacco from Laidlaw & Co, on the day where a peace treaty had ended the War of 1812 between Britain and America. Because of this, the price of American tobacco deceased between 30 to 50%. While Organ was aware of this fact, Laidlaw was not. Organ did not mention this change, which caused a large loss on the sale. Laidlaw & Co. used force to get the tobacco back, causing Organ to file a lawsuit against them for breach of contract.

The ruling said that a buyer did not need to share any knowledge of other factors that might have an effect on the goods as long as there isn’t any imposition on either party. This was the first example of the United States Supreme Court using caveat emptor in a court case.