Caveat Emptor

Tobey v. Loranger, 2020 ONSC 4669 (CanLII)

[24] The trial judge does not specifically address the issue of caveat emptor in his Reasons. It is not clear to what extent this issue was raised at trial. In any event I have concluded that the maxim of caveat emptor would not have provided a viable defence to the plaintiff’s claim. In the Supreme Court of Canada decision Fraser-Reid v. Droumtsekas, 1979 CanLII 55 (SCC), [1980] 1 S.C.R. 720, Justice Dickson notes that,

Although the common law doctrine of caveat emptor has long since ceased to play any significant part in the sale of goods, it has lost little of its pristine force in the sale of land.

[25] The reason why the rule of caveat emptor rarely raises a defence in the sale of goods is because of the implied conditions which are usually associated with the sale of goods. As noted by Don J. Manderscheid, Q.C. in his article Caveat Emptor and the Sale of Land: The Erosion of a Doctrine, 2001 Can LII Docs 142,

Unlike the sale of goods, in the ordinary course of the buying and selling of land, without an express warranty or contractual provision in the sale agreement, the law will not imply a warranty as to the merchantability of the land for purposes of habitation.

[26] In any event, the doctrine of caveat emptor will not be invoked in the presence of a contractual condition. See for example Matz v. Copley, 2010 ONSC 5565; affirmed by the Court of Appeal at 2011 ONCA 485. As previously noted, the trial judge found a breach of the purchase agreement. This is reflected in his comments that Dan’s Auto Sales had agreed to sell a truck that was “certified” and which turned out to be unroadworthy. He correctly concluded that this was not the plaintiff’s problem, “its Dan’s Auto Sales’ problem”.

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.

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.