Caveat Emptor Explained: Business Law (Management)

Caveat emptor (Latin term) means “let the buyer beware”. It means the buyer is responsible if the product fails to meet expectations or has some defects. This doctrine places the responsibility on buyers to reasonably examine the product/service before accepting it and take responsibility for its condition. The term was commonly used in real estate related things, but also applied to few other goods, as well as some services.

Over time, this approach resulted in several dis-satisfied buyers who felt cheated with the sellers. Over time, the caveat emptor got replaced with the caveat venditor, which now places the onus on the seller.

Q) Rakesh had planned to go for short holiday in Goa along with his wife. He started looking out for hotels in Goa and based on various websites and reviews he had booked a Le Grand Hotel in North Goa. He paid the money in advance and the booking was confirmed. On reaching this hotel, he found that the hotel was not as per the hotel’s website and reviews. Further, on reaching the hotel he realized that the pictures displayed on the website were in such angle so as to conceal the real look and image of the hotel property. Rakesh demanded a refund, but the Hotel refused stating that Rakesh was supposed to check before booking and quoted the principle of “Caveat Emptor”.

Please help Rakesh in the following:

a. Is Rakesh’s claim defeated under the principle of Caveat Emptor? Please give reasons for your answers. (5 Marks)
b. Assuming if Rakesh wanted to pursue this case before a Consumer Court, what are the remedies he would apply for?

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