So many people assume they understand several principles or phrases used by lawyers because they have seen or heard it so much. In this learning series, we will be explaining some legal principles for the benefit of the common man.
This week, we shall look at the common phrase, Caveat Emptor. In Nigeria especially it is possible to have seen the phrase on buildings. You might have assumed it means that “this house is not for sale” or “beware of fraudsters”. It is a latin phrase that means let the buyers beware. So when next you see it on a building it is warning the potential buyers of the building to be careful of what they are paying for. Probably the building is a subject of litigation of other contentious matter and they want any potential buyers to be careful and do proper check before paying anyone for it.
Even though the principle of caveat Emptor is used majorly in real estate transactions. It can also be used in other legal transactions such as Mergers and Acquisitions, Sales of goods, etc. In this case it is emphasizing that the party buying something must do due diligence on the property to check all existing encumbrances before buying or executing the contract. In mergers and acquisitions, caveat Emptor is telling the acquiring company to do due diligence on the property of the company to be acquired to check if there is any legal issue, defect or any other encumbrances on the property.
In some countries, the seller is compelled to make some certain disclosures about the property to be sold. Notwithstanding this disclosure, it is important that the buyer still do due diligence on the property before executing the contract. A proper due diligence can be conducted by your Solicitors. Do contact one today.
Now you know what Caveat Emptor means, so next time you see it on a building you know that they are warning you to beware before buying same.
Till we come your way next time when we shall look at another legal term, keep staying safe. Contact your Solicitors before signing any document.
Key Contributor: Adeyemi Owoade