What does the phrase "caveat emptor" mean in a contract?

When used in a contract, the Latin phrase "caveat emptor" means "let the buyer beware." It indicates that the buyer of a particular item is making the purchase at his own risk and with the expectation that he assumes the responsibility to inspect any potential purchase for possible defects.

Modern society tends to operate more under the principle of "caveat venditor," or let the seller beware. Consumers expect sellers to honor any guarantee, whether actual or implied, that an item functions properly unless otherwise stated. Sellers are not allowed by law to misrepresent the items they sell or to conceal known defects in them.