## Facts

- Sellers built a home in 1970–1971; a basement foundation wall was damaged, bowed significantly, and was braced with steel I-beams.
- The condition contributed to basement dampness and elevated utility costs.
- When the home was listed for sale (circa 1977–1978), marketing materials did not disclose the bowed wall or special bracing.
- Before purchase, one buyer observed the steel beams in the basement but did not ask about their purpose.
- Buyers asked about basement moisture and utility costs; sellers attributed water entry primarily to seasonal spring rains.
- The purchase contract disclaimed representations outside the contract and stated the buyers relied on their own inspection.
- Years later, while attempting to resell the home, buyers learned the bowed wall’s significance and were told repair could be very expensive.

## Issues

1. Whether the doctrine of caveat emptor barred purchasers’ recovery for a structural defect in residential real estate under these facts.
2. Whether the sellers’ nondisclosure and statements about basement water amounted to fraud sufficient to defeat caveat emptor.
3. Whether the structural condition was open to observation or discoverable upon reasonable inspection, and whether buyers had an unimpeded opportunity to inspect.

## Decision

- The Supreme Court of Ohio reversed the judgment for the purchasers and entered judgment for the sellers.
- The court held caveat emptor precluded recovery because: (1) the condition was open to observation or discoverable on reasonable inspection, (2) buyers had an unimpeded opportunity to examine the premises, and (3) there was no fraud by the sellers.
- Observing the steel bracing was sufficient to make the defect “open to observation,” even if the buyers lacked technical expertise as to cause or remediation.

## Legal Principles

- Caveat emptor bars a purchaser’s claim for a structural defect in real estate when:  
  - the condition is open to observation or discoverable upon reasonable inspection,  
  - the purchaser had an unimpeded opportunity to examine the premises, and  
  - there is no fraud by the vendor.
- A seller of real estate generally has no duty to disclose all known conditions; purchasers bear responsibility to inquire and investigate when observable conditions suggest potential defects.
- Mere nondisclosure does not defeat caveat emptor where the condition is discoverable and the seller does not conceal or hinder inspection; actionable fraud requires more than the buyer’s failure to investigate.

## Conclusion

The court reaffirmed caveat emptor in Ohio residential real-estate sales and held that buyers could not recover for a structural defect where visible bracing made the condition discoverable, inspection was not impeded, and the sellers’ conduct did not amount to actionable fraud.


Layman v. Binns, 35 Ohio St. 3d 176, 519 N.E.2d 642 (Ohio 1988)