As humans cannot live in isolation and we have to depend on others for many things we are almost all the time engaged in exchanging goods or services. Whether it is business or personal life, selling and buying is inevitable.
In buying and selling, one of the important things is that the goods are as per the expectations of the buyer i.e. the goods which are being exchanged are of the same quality and nature as buyer has understood. Now this understanding of the buyer regarding the goods can be right or wrong. But the question is who is responsible for such a mistake? Is it buyer or seller?
This has been the cause of much problems since the first conflict arose between the buyer and the seller. Even today such question arises under the sale of goods contract and the generally applicable principle or doctrine is called Caveat emptor
Caveat emptor is a latin phrase which in English is translated as Let the buyer beware which in simple words mean that it is the responsibility of the buyer himself to be aware of the goods (or subject matter) involved in the transaction and the other part i.e. the seller, has no specific responsibility to disclose anything about the goods even if the seller knows or doubts that the goods are not of the quality or nature as buyer has perceived them to be AND the perception is based completely on buyer’s own knowledge.
Therefore there are two important aspects of this generally applicable rule:
- seller is under no obligation to correct the buyer if the buyer has made any mistake in understanding or judging the goods
- buyer reached the conclusion on his own i.e. based on his own knowledge
In such case, it is the duty of the buyer himself to take care of his interest and he himself is responsible for the goods bought by him and the buyer is expected to figure out the defects or problems which can be reasonably found under the situation.
For example, A sold a book to B. B, thinking that book is still applicable/usable under the new syllabus offered to buy the book. Although A knows that book is not good after the recent changes in the syllabus and without making any disclosure he accepted the offer. Contract is binding and later if B comes to know that book is not usable then he cannot hold A responsible for this. But, if A has stated that book is still good where it is not than in such case B can avoid the contract as it will amount to fraud.
However, there are situations where the concept or principle of caveat emptor is not applied. Also, the application of this principle varies from country to country.
Now a days, the concept of caveat emptor, however, is not applicable so loosely anymore and in many countries buyer has given much rights and powers. For example in UK the law related to sale of goods is now more inclined to the principle of caveat venditor — let the supplier beware which is completely opposite to caveat emptor principle.