Scribe of wisdom

Caveat emptor

Latin terminology which later became a proverb in English and is widely used in commerce / legal transactions. The meaning of this term is is Let buyer beware. In many jurisdictions, it is the contract law principle that places the onus on the buyer to perform due diligence before making a purchase.

A caveat emptor disclaimer is intended to resolve disputes that arise from information asymmetry, a situation in which one among the two parties invovled in a transaction, (in this context seller) seller has more information than the other party (in this context buyer) buyer about the quality of a good or service.

In short, it si the belief that the consumer is responsible for making sure a product/ service is worthy and proper before purchasing.

Example

A warranty is a security for a buyer of a used car in order to protect them because caveat emptor usually prohibits buyers from returning the used car.

Caveat emptor applied to the housing industry because once the house is sold, there is no going back.

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