Posted in Marketing and Strategy Terms, Total Reads: 481
Definition: Caveat Venditor
While doing market transactions, sellers must be cautious of being cheated by the buyer. This is known as Caveat Venditor, which is a latin term, meaning-“let the seller beware”.
This is a modern trend under laws protecting the consumers.
Earlier, the buyer used to assume all the risk of the product being defective. So, before finalizing the deal for a transaction, the buyer was supposed to check and judge the product thoroughly. If any problem arose after the deal was signed, then the seller could not be blamed because the buyer had the chance to check the product and satisfied himself/herself. This led to the sellers hiding information from the buyer about latent defects (which cannot be detected by reasonable examination).Examples of such defects are:
a. Typhoid germs in milk
b. Beer contaminated with arsenic
This began to have a detrimental effect on the development of trade and commerce. As a result, commercial transactions started to decline.
So, the doctrine of Caveat Venditor was included in the common laws governing transactions. This places increased responsibility, for the product, on the sellers and discourage them from selling defective goods to the consumers. In this way, the sellers assume liability to the buyers for the product being sold.
But, this doctrine goes against the sellers in cases when buyers have more expertise than the sellers as far as the product is concerned.
For example, the sellers might not be aware of a painting being not original. In this scenario, a buyer, with adequate expertise, can sue the seller for selling that painting to him.