Soapy Smith gambling house. Legend has it that above the entrance of the stairway leading upstairs to the gambling games was a sign that read "caveat emptor", Latin for "let the buyer beware". Smith's younger brother, Bascomb Smith, joined the gang and operated a cigar store that was a front for dishonest poker games and other swindles, operating in one of the back rooms. Other operations included fraudulent lottery shops, a "sure-thing" stock exchange, fake watch and bogus diamond auctions, and the sale of stocks in nonexistent businesses. Because of bribes, some of the police officers patrolling the streets would not arrest
Caveat emptor defects or otherwise made material misrepresentations amounting to fraud. Before statutory law, the buyer had no express warranty ensuring the quality of goods. In the UK, common law requires that goods must be "fit for the particular purpose" and of "merchantable quality", per Section 15 of the Sale of Goods Act but this implied warranty can be difficult to enforce and may not apply to all products. Hence, buyers are still advised to be cautious. The modern trend in the U.S. is that the implied warranty of fitness for a particular purpose applies in the real-estate context to only the