Barnard v. Kellogg (1870)
In Barnard v. Kellogg (1870) 77 U.S. 383, the Supreme Court of the United States, in discussing the rule of caveat emptor, said:
"No principle of the common law has been better established, or more often affirmed, both in this country and in England, than that in sales of personal property, in the absence of express warranty, where the buyer has an opportunity to inspect the commodity, and the seller is guilty of no fraud, and is neither the manufacturer nor grower of the article he sells, the maxim of caveat emptor applies. Such a rule, requiring the purchaser to take care of his own interests, has been found best adapted to the wants of trade in the business transactions of life. And there is no hardship in it, because if the purchaser distrusts his judgment he can require of the seller a warranty that the quality or condition of the goods he desires to buy corresponds with the sample exhibited. If he is satisfied without a warranty, and can inspect and declines to do it, he takes upon himself the risk that the article is merchantable. And he cannot relieve himself and charge the seller on the ground that the examination will occupy time, and is attended with labor and inconvenience. If it is practicable, no matter how inconvenient, the rule applies. One of the main reasons why the rules does not apply in the case of a sale by sample, is because there is no opportunity for a personal examination of the bulk of the commodity which the sample is shown to represent. Of such universal acceptance is the doctrine of caveat emptor in this country, that the Courts of all the States in the Union where the common law prevails, with one exception South Carolina, sanction it."
The Supreme Court also said:
"It is to be regretted that the decisions of the courts, defining what local usages may or may not do, have not been uniform. In some judicial tribunals there has been a disposition to narrow the limits of this species of evidence, in others to extend them, and on this account mainly the conflict in decision arises. But if it is hard to reconcile all the cases, it may be safely said they do not differ so much in principle, as in the application of the rules of law. The proper office of a custom or usage in trade is to ascertain and explain the meaning and intention of the parties to a contract, whether written or in parol, which could not be done without the aid of this extrinsic evidence. It does not go beyond this, and is used as a mode of interpretation on the theory that the parties knew of its existence, and contracted with reference to it. It is often employed to explain words or phrases in a contract of doubtful signification, or which may be understood in different senses, according to the subject-matter to which they are applied. But if it be inconsistent with the contract, or expressly or by necessary implication contradicts it, it cannot be received in evidence to affect it. See Notes to Wrigglesworth v. Dallison, 1 Smith's L. Cas. 670 Doug. 200; 2 Pars. Cont. 9, p. 535; Taylor, Ev., p. 943, and following. `Usage,' says Lord Lyndhurst, `may be admissible to explain what is doubtful; it is never admissible to contradict what is plain.' Brackett v. Royal Exch. Ass. Co., 2 Crompt. J. 249. And it is well settled that usage cannot be allowed to subvert the settled rules of law. See note to Smith's L. Cases, supra. Whatever tends to unsettle the law and make it different in the different communities into which the state is divided, leads to mischievous consequences, embarrasses trade, and is against public policy. If, therefore, on a given state of facts, the rights and liabilities of the parties to a contract are fixed by the general principles of the common law, they cannot be changed by any local custom of the place where the contract was made. In this case the common law did not, on the admitted facts, imply a warranty of the good quality of the wool, and no custom in the sale of this article can be admitted to imply one. A contrary doctrine says the court, in Thompson v. Ashton, 14 Johns. 317, `would be extremely pernicious in its consequences, and render vague and uncertain all the rules of law on the sales of chattels.'"