The Transfer of Title & Performance of the Contract

Question 1

What is the nemo-dat rule?

Answer 1

• Nemo dat = ‘no one gives who possess not’
• Main rule: seller can only pass ownership of goods to a buyer if he owns or has the right to sell them at the time of sale

Question 2

What is estoppel and what is the consequence and who is protected under it?

Answer 2

• The owner acts in such a way that it appears that the seller has the right to sell the goods
• Consequences: owner is estopped from denying this
• Innocent third party purchaser protected

Question 3

What are the two different categories of estoppel?

Answer 3

• Estoppel by representation
Representation by the owner must be voluntary
(Debs v Sibec Developments)
• Estoppel by negligence
Owner must have a duty to care
(Moorgate Mercantile Co Ltd v Twitchings)

Question 4

What is a mercantile agent?

Answer 4

• S. 1(1) FA: ‘the expression ‘mercantile agent’ shall mean a mercantile agent having in the customary
course of his business as such agent authority either to:
sell goods, or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods’

Question 5

What are the requirements for sale by a mercantile agent?

Answer 5

o The mercantile agent must be independent from the person for whom he is an agent (his principal)
o He must act in a business capacity
o He must be in possession of the actual goods or documents of title to the goods when he sells them to the third party
o Possession must:
 Be with the owner’s consent
 Be in his capacity as mercantile agent and for the purpose connected with his business as a mercantile agent and the sale
o He must actually sell or dispose of the goods (agreement to sell does not fall within this exception)
o The sale or disposition must be made in the ordinary course of business of a mercantile agent
 In business hours; from business premises; acting in such a way as the third party would expect a mercantile agent to act (Oppenheimer v Attenborough)

Question 6

What point does Heap v Motorist’s Advisory Agency make regarding sale by a mercantile agent?

Answer 6

The third party must acquire the goods in good faith and without knowing the true owner’s rights. The
burden of proof is on the third party.
(Heap v Motorist’s Advisory Agency)

Question 7

Define Sale under a voidable title?

Answer 7

– S. 23: ‘When the seller of goods has a voidable title to them, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the
goods, provided he buys them in good faith and without notice of the seller’s defect of title’

Question 8

What is the difference between a contract which is void and a voidable contract in terms of cases?

Answer 8

– Ingram v Little – Lewis v Averay
– Shogun Finance Ltd v Hudson
– Car & Universal Finance Co Ltd v Caldwell

Question 9

• Who is protected under the main rule of nemo-dat?

Answer 9

• S. 21(1): ‘Subject to this Act, where goods are sold by a person who isn’t their owner, and who doesn’t sell them under the authority or with the consent of the owner, buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell’

Question 10

In what occurrence does the nemo-dat rule apply?

Answer 10

• Only applies to an actual sale and not to a situation where there is only an agreement to sell (Shaw v Commissioner of Police)