The general rule is that only the true owner is entitled to sell the goods. Hence, a seller can sell any goods belonging to him but can not sell the goods belonging to others or the goods possessed or owned by other. If the sellers' title to the goods is defective, the buyer's title will also be defective, though the buyer has acted bonafide and has paid for the goods. This rule is based on Latin maxim "Namo dat quod non habet" The English version of this phrase is "no one can give what he does not have had himself."
The Contract Act, 2056 has not directly recognized this rule. But the Supreme court of Nepal has recognized it through its' judicial decision that no one can pass the better title than he acquired. But Indian sale of goods Act, 1930 has clearly defined about this doctrine. According to Section 27 of that Act has defined as "Where goods are sold by a person who is not the owner of the goods 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."
The general aim of this doctrine is to protect the interest of society and to secure the right of the true owner of goods. Main intention of this rule is only the true owner can pass a better title of the goods.
Transfer of title by non owner
But there are some exceptional circumstances on which a seller or non-owner can give or pass a better title of goods to the buyer.
- Sale by mercantile agent.
- Transfer of title by estopple.
- Transfer of title by a co-owner.
- Sale of goods in possession under a voidable contract.
- Sale of goods in possession of a buyer after an agreement to sell.
- Sale by an unpaid seller.
- Sale under other laws like; pledge, finder of lost goods, official receiver.
- Purchase in free market.
- Doctrine of 'Caveat Emptor'
The term 'Caveat Emptor' is a Latin expression, the English version of this expression is "let the buyer beware". It means that the buyer must take the precaution before to buy the goods. This doctrine stress on that to supply goods whether fit or not suitable for a particular purpose of the buyer is not the duty of the seller. In other words the buyer himself must take care of his own purpose while purchasing the goods. The central intention of this doctrine is that the buyer must be careful while purchasing the goods. He must inspect all the facts about the goods before purchasing the goods.
Exception of the rules
The Indian sale of goods Act, 1930, the contract Act, 2056 of Nepal has also accepted some exceptions to this doctrine under the several concerned sections. These are as follows:
- Disclosure of particular purpose: Where the buyer makes known to the seller the purpose for which he is purchasing the goods, the seller must supply the goods to meet such purpose of buyer. In case of the unfit goods supplied to meet that purpose, the buyer is entitled to reject such goods. In such case, due to the disclosure of purpose the doctrine of caveat emptor doesn't apply.
- Misrepresentation by seller: In the case, where the seller makes misrepresentation about the goods sold and buyer purposes the goods relies upon that misrepresentation, the doctrine of caveat emptor doesn't apply
- In case of concealment of defect: If the seller knowingly consuls the defects, which cannot be discovered on a reasonable inspection, the doctrine of caveat emptor doesn't apply.
- In case of sale by description: The goods sold by description must correspond with the description. If the seller sells the goods by description but the goods supplied by him do not correspond to the description, the doctrine of caveat emptor doesn't apply.
- In case of sale by sample: Another case where the doctrine of caveat emptor doesn't apply is that if the seller sells the goods by sample but the goods supplied by him do not correspond to the sample.