Caveat emptor is a Latin phrase that means “let the buyer beware.”
Functionally, courts apply caveat emptor as a rule to limit the ability of purchasers to sue sellers when the purchaser failed to reasonably test, examine or inspect a purchased product.
When sellers attach a caveat emptor warning to what they are selling, they are typically warning purchasers that they must take what they buy “as is.”
If someone was selling a used car with a caveat emptor warning, a potential buyer would be put on notice to take the car for a test drive, and to examine things like the engine, transmission and brakes before buying the car. Caveat emptor would prevent this buyer from suing the seller if, after buying the car, the buyer learned that the car’s brakes needed to be replaced.
However, caveat emptor does not protect sellers if they engage in fraudulent or negligent selling practices. So, in the used car example, caveat emptor would not protect the seller if the seller promised the buyer that the car’s brakes were in perfect condition.