Buyer beware! is alive and well in Ontario. This is an ancient legal concept in land law going back hundreds of years in the English legal system. The phrase “Buyer beware” is really a long Latin phrase, the first two words of which are “Caveat emptor” or “Buyer beware.” The full Latin phrase translates as “Let the purchaser, who is not to be ignorant of the amount and nature of the interest, exercise proper caution.”
Why is there a caveat emptor system in Ontario? One reason is historical. We inherited an economic system which thinks there should be bargaining freedom between the purchaser and vendor while the contract is in the process of being made and, only after that, should the courts impose themselves on the contract. A sort of laissez-faire attitude from the old days. Another reason is that there should be no guarantee by the vendor of the purchase price of the property. It is up to the purchaser to bargain with the vendor for the lowest price and for the vendor to bargain for the highest price. In other words, fair market value has nothing to do with the real value of land but everything to do with what a purchaser is willing to pay for the land. Thus, if the purchaser’s spouse really likes the kitchen or the shop, the purchaser may have to pay more for the property then it is really worth to keep the purchaser’s spouse happy.
A final reason for caveat emptor is the contract itself and this goes back to bargaining freedom. The purchaser can protect the purchase by saying in the contract “I want to be sure that I am purchasing this or that when I purchase your property.” Thus, Bora Laskin, the most famous judge in Canadian judicial history, said: “Absent fraud, mistake, or misrepresentation, a purchaser takes existing property as he find it, whether dilapidated, bug infested, or otherwise uninhabitable, or deficient in expected amenities, unless he protects himself by contract terms.”