SALES OF GOODS LAW

Sales Of Goods Law

Sales Of Goods Law

Exceptions to the rule of 'Nemo Dat Quod Non Habet'

Nemo Dat Quod Non Habet means that no one can better transfer the title than he possesses. The modern law on the point has been summarily stated by Denning L J in the following words “In the development of our law, two principles have striven for mastery. The first is the protection of property: no one can give a better title than he himself possesses. The second is the protection of commercial transactions: the person who takes in good faith and for value without a notice should get a good title. The first principle held sway for a long time but it has been modified by the common law itself and by statute so as to meet the minds of our times.”

Sale by person not the owner - “Subject to the provisions of this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner thereof 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, unless the owner of the goods is by conduct precluded from denying the seller's authority to sell. Provided that, where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorized by the owner of the goods to make the same, provided that the buyer act is good faith and has not at the time of the contract of sale notice that the seller has not authority to sell.”

Immutable/Non-negotiable or Inalienable Rules are the rules which are prescribed by the law and cannot be negotiated by the parties. Section 27 is analogous to Section 21 of the English Sale of Goods Act and Section 108 and 178 of the Indian Contract Act.

Sec.178. Pledge by mercantile agent: “Where a mercantile agent is, with the consent of the owner, in possession of goods or the documents of title to goods, any pledge made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorized by the owner of the goods to make the same; provided that the Pawnee acts in good faith and has not at the time of the pledge notice that the pawnor has not authority to pledge.” Explanation: In this section, the expression "mercantile agent" and "documents of title" shall have the meanings assigned to them in the Indian Sale of Goods Act, 1930 (3 of 1930).

Evolution of the law

The Special Committee had opined that:

As regards sales by an apparent owner of goods, the Law Commissioners cut the Gordian knot ...