Question

Many ethical considerations form the basis of that relationship and all of us, as consumers are aware of the good, the bad, and the ugly that can come about between corporations and their customers. “Caveat emptor” translates to “let the buyer beware;” “Caveat venditor” translates to “let the seller beware.” Describe how the difference between these two phrases can be seen in the marketplace. Use an example to illustrate your thought.

Answer 1

The differences between these two phrases can be seen in the marketplace between the several types of different transactions that occur between the buyers and the sellers.

‘Caveat emptor’ can be seen in the marketplace where onus is paced on the buyer to perform a due diligence before actually making the purchase. A very good illustration of this is transactions in the real property market. In the real property market buyers buy land and property that is attached directly to it. Generally home builders provide an implied warranty of fitness to buyers who buy new properties. Subsequent transactions are subjected to the principle of caveat emptor.

Caveat venditor, on the other hand, means ‘let the seller beware’. This is a counter to caveat emptor. In this case sellers will be held responsible if the goods sold by them is found to be defective in any manner or if they vary from the specifications. To illustrate this phrase take the example of a car dealer selling a car to Mr. XYZ. The dealer has the responsibility to ensure that the car being sold does not have any defects and that it matches the specifications that has been communicated to the buyer.