caveat emptor: "let the buyer beware." This rule generally applies to all sales between individuals. It gives the buyer full responsibility for determining the quality of the goods in question. The seller generally has no duty to offer warranties or to disclose defects in the goods. |
The general rule undoubtedly is, that a person cannot transfer to another a right which he does not himself possesses. The rule ofcaveat emptor spells out two exceptions to the rule, one in cases for encouragement of commerce such as sales in market overt and other to the transfer of negotiable instruments. Take for example, if the seller has endorsed and delivered to the buyer the Bill of Leading or any other documents of title to the goods and the buyer has endorsed and delivered it to his sub buyer, then the sub buyer, provided he has taken the document in good faith, as well as for valuable consideration, is entitled to the goods free from any right in the original seller to stop them, and thus his position is better than that of the original buyer, same is a position of sales in market-overt.