Caveat emptor is
Latin for "Let the buyer beware" (from
caveat, "may he beware", the
subjunctive of
cavere, "to beware" +
emptor, "buyer"). Generally,
caveat emptor is the
contract law principle that controls the sale of
real property after the date of
closing, but may also apply to sales of other goods. The phrase
caveat emptor arises from the fact that buyers typically have less information about the good or service they are purchasing, while the seller has more information. The quality of this situation is known as '
information asymmetry'. Defects in the good or service may be hidden from the buyer, and only known to the seller.