The Principle of Nemo Dat Quod Non Habet Explained [PDF]

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This chapter deals with the situation where a seller, who has no right to the goods, is nevertheless
able to pass good title to a third party.
Typical situations where this might arise include:
• A steals the goods and sells them to B who buys them in good faith for value.
• A sells the goods to B1 but retains possession of them and then wrongly sells them
again to B2.
• A passes his goods to B to seek offers for sale but B sells them without A’s authority and
keeps the proceeds of sale.
• A buys goods on credit terms and then resells or pledges them to B with no intention of
paying for them.
The typical question that arises in such circumstances is which of two innocent parties
should suffer for the fraud of a third? The courts have to choose between upholding the
rights of the original owner of the goods and protecting the interests of a purchaser who
buys the goods in good faith and for value.
Chapter 7 Transfer of ownership by a non-owner 85