Question 4 (a)
No seller can pass a better title than his own: the rule and its exceptions
12 marks
- Time to write
- About 24 minutes
Question
Question 4 (a) · 12 marks"No seller of goods can pass to a buyer of goods a better title than the one he himself possesses." Examine this statement and explain, as per the Sale of Goods Act, 1930, the exceptions to this rule.
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- ExamineA statement to judge: take a stand on it in your first line, and come back to it at the end.
Write it in this order
- Read; underline the asks; jot your points 2 min
- 1 The rule in section 27, examined 4 marks 7 min
- 2 Exceptions 8 marks 13 min
- Check: every ask answered, key terms underlined 2 min
Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks.
Try it first. About 24 minutes for 12 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
The rule. Section 27 of the Sale of Goods Act, 1930 lays down that where goods are sold by a person who is not their owner and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had. This is the rule nemo dat quod non habet: a person cannot pass on a title he does not have. It protects the true owner.
1A stolen cycle sold on the footpath passes no title—the buyer's cash buys him nothing.
Nemo dat quod non habetA person cannot pass on a title he does not have.
2But the agent holding the owner's car and papers with consent can pass a good title.
Sale by a mercantile agentIf he was in possession of the goods or documents of title with the owner's consent
3And the seller still holding the sold goods can pass title to an innocent second buyer.
Sale by a seller in possession after saleDelivers or transfers the goods or their documents of title to a person who receives them in good faith without notice of the previous sale
Exceptions. In the following cases a non-owner can pass a good title to a buyer who buys in good faith:
- Sale by a mercantile agent (proviso to s. 27): if he was in possession of the goods or documents of title with the owner's consent, sold them in the ordinary course of business as a mercantile agent, and the buyer acted in good faith without notice that he had no authority.
- Sale by one of several joint owners (s. 28) who is in sole possession with the others' permission, to a buyer in good faith who has no notice, at the time of the contract, that the seller had no authority to sell.
- Sale by a person in possession under a voidable contract (s. 29), before the contract is rescinded, to a buyer in good faith.
- Sale by a seller in possession after sale (s. 30(1)): the seller, or a mercantile agent for him, delivers or transfers the goods or their documents of title to a person who receives them in good faith without notice of the previous sale.
- Sale by a buyer in possession before property has passed (s. 30(2)): a buyer who has obtained possession of the goods or their documents with the seller's consent delivers or transfers them to a person who receives them in good faith without notice of any lien or other right of the original seller.
- Resale by an unpaid seller who has used his right of lien or stoppage in transit: where the goods are perishable, where he has given the buyer notice of his intention to resell and the buyer does not pay within a reasonable time, or where the contract reserves a right of resale; the new buyer gets a good title.
- Estoppel: where the owner by his conduct leads the buyer to believe the seller has authority.
- Sales under other Acts: by a finder of goods, where a thing commonly sold is lost and the owner cannot with reasonable diligence be found or refuses to pay the finder's lawful charges, and the thing is in danger of perishing or the charges reach two-thirds of its value; by a pawnee, on the pawnor's default and after reasonable notice of the sale; and by an Official Receiver or a liquidator.
Where the 12 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | The rule in section 27, examined | 4 |
| 2 | Exceptions | 8 |
| Total | 12 |
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