Caveat Emptor (Let the Buyer Beware)
The Latin term “Caveat Emptor” means “let the buyer beware.” It is a principle of commerce where the buyer is responsible for assessing the quality and suitability of a product before purchasing it.
Concept: This doctrine emphasizes that the seller is not obligated to disclose all the details about a product, and the buyer should exercise caution and judgment.
Application:
- The buyer must carefully examine goods for defects or problems.
- It is applicable in cases where the buyer has the opportunity to inspect the goods before purchase.
Limitations: The principle has some exceptions, where the seller is held accountable:
- Implied Conditions and Warranties: If a product does not match its description or intended use.
- Fraud or Misrepresentation: If the seller deliberately hides information or provides false details.
- Fitness for Purpose: If the buyer specifies their purpose for purchasing and relies on the seller’s expertise.
Modern Relevance: In today’s consumer-friendly markets, laws like consumer protection acts have reduced the strictness of Caveat Emptor by ensuring product safety and fair trade practices.
Unpaid Seller
An unpaid seller is a seller who has not been fully paid or compensated for the goods sold. This includes situations where:
- The buyer fails to pay the agreed price.
- Payment is made using a negotiable instrument (e.g., a cheque), but it is dishonored.
Rights of an Unpaid Seller:
- Right of Lien: The seller can retain possession of the goods until payment is made.
- Right to Stoppage in Transit: If goods are in transit and the buyer becomes insolvent, the seller can stop the goods.
- Right to Resell: If payment is not made within a reasonable time, the seller can resell the goods.
- Right to Sue for Price: The seller can take legal action against the buyer for recovery of the amount due.
Obligations of the Buyer: The buyer is legally obligated to pay the agreed amount for the goods or services received.