Caveat Emptor

Written by Fmi.Online Friday January 6, 2023
Caveat Emptor (buyer beware) is a legal principle that places the due diligence burden of a transaction on buyers. It means that the person making the purchase is responsible for making an informed decision.  


The phrase caveat emptor  comes from Latin and it means “let the buyer beware”. It is a legal term implicitly involved in a sales transaction, where the buyer has the unilateral responsibility to research the product or service properly to make sure it fits all his requirements. Any difference between expectations and actual result can’t be blamed on the seller, according to this principle. This is a rule that normally applies in free market transactions, with the exception of illegal situations where the seller has acted in bad faith against the customer’s interest. This principle has been softened by legislation that aims to protect consumers from potential market misconduct.

In  a nutshell :

  • Caveat emptor is a Latin phrase that can be roughly translated in English to "let the buyer beware."
  • While the phrase is sometimes used as a proverb in English, the principle of caveat emptor is also sometimes used in legal contracts as a type of disclaimer.
  • A caveat emptor disclaimer is intended to resolve disputes that arise from information asymmetry, a situation in which the seller has more information than the buyer about the quality of a good or service.
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