Caveat emptor is a Latin phrase that loosely translates to “let the buyer beware.” It simply means that an individual buys at their own risk. In principle, it means that the buyer is responsible for making sure that a product works to their satisfaction or that the item they are buying is genuine before buying it or paying for it.
By the implication of Caveat Emptor, it serves as a disclaimer that the buyer must be confident about the product or the goods he wants to purchase because the seller will be under no obligation to provide a refund for it.
In Nigeria, we see bold signs conspicuously written on the wall of the fence of the property which often read; “This house is not for sale, beware of fraudsters”. Sometimes you may see, “This property is a subject of a civil litigation in suit number….. before XYZ court”. I have even seen some hilarious disclaimers written on the walls of a building like “This House Is Not For Sale, Beware Of My Son Emeka”.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
This is for real estate transactions; potential buyers are warned to ensure that they are purchasing a good root of title or purchasing the property from the rightful owner, then in other forms of transactions like car purchase; the disclaimer admonishes buyers to ensure that the item they are purchasing is fit and proper to their satisfaction before they part their money to the seller because the seller will not be held liable for any issue that may arise out of the product once the transaction has been concluded and the buyer didn’t investigate very well to pinpoint such issue during the transaction.
All these disclaimers make up what we call in law “caveat emptor”, it is simply sending warnings to prospective buyers for them to carry out their due diligence and be sure that the item they want to purchase is genuine and that they are buying from the right person.
The importance of caveat emptor in high-value transactions is that whilst the parties to the transaction are expected and obligated to fully disclose every information relevant to the transaction, you the buyer are very much expected to up your guard and do your homework, gather independent information on the property because equity will not aid the sloppy or the indolent.
Potential buyers are warned by the phrase to do their research and ask pointed questions of the seller because the seller will not be responsible for problems that the buyer encounters with the product after the sale.
In many jurisdictions, caveat emptor is the contract law principle that places the onus on the buyer to carry out due diligence before making a purchase but despite this disclaimer, in principle and in practice there are exceptions to it. Caveat emptor does not give sellers carte blanche or the legal coverage for them to promote a fraudulent transaction. For instance, if the seller lies or misrepresents facts during the transaction the seller will be liable even if the buyer fails to investigate and carry out due diligence.