Caveat Emptor

Ashrafi v. Carraro, 2019 ONSC 6326 (CanLII)

The Doctrine of Caveat Emptor

65 Before proceeding, I pause to briefly address the doctrine of caveat emptor ("let the buyer beware").

66 The appellants submit that circumventing the parties' intentions as expressed by the entire agreement clause in the APS erodes the doctrine of caveat emptor. I disagree with the premise of this submission. Having concluded that the entire agreement clause in this case operates retrospectively, not prospectively, it cannot be said that the respondents' claim for negligent misrepresentation has the effect of circumventing the parties' intentions or the entire agreement clause.

67 At para. 38 of its reasons, the Divisional Court quoted from Killeen J.'s decision in Kaufmann, at para. 119, for the proposition that, "once a vendor "breaks his silence" by signing the SPIS, the doctrine of caveat emptor falls away as a defence mechanism and the vendor must speak truthfully and completely about the matters raised in the unambiguous questions at issue". Although the SPIS at issue in Kaufmann was expressly incorporated into the agreement of purchase and sale, I agree with the thrust of Killeen J.'s remarks. So long as a purchaser's action is not precluded by the agreement of purchase and sale, the vendor cannot hide behind the doctrine of caveat emptor if he or she breaks the silence by signing a SPIS.

also see Entire Agreement Clauses

Gladu v Robineau, 2017 ONSC 37 (CanLII)

[268] A vendor is not obligated to disclose all known facts affecting the use or value of the property, which may be material to a purchaser’s judgment. A purchaser must form his or her own judgment: caveat emptor.

[269] The doctrine of caveat emptor will not be displaced by silence about defects, unless the silence relates to some material fact, which there is a duty on the silent party to disclose to the other. Put another way, mere silence, without more, on the part of a vendor regarding a defect subsequently discovered by a purchaser, will not normally found a cause of action for misrepresentation or for fraud: see Alevizos v. Nirula, 2003 MBCA 148 (CanLII), 180 Man. R. (2d) 186, at para. 19.