The general rule is that where goods are sold by a person who is not the owner of them, the buyer acquires no better title than the seller had. This rule is expressed by the maxim ‘Nemo dat quad non habet‘ i.e. no person can give what he has not.This rule protects the true owner of the goods against anyone who buys his goods from a person who sold without his authority or without having any right In them. There are some exceptions to this rule. Under these exceptions a valid title can be given by a person who is not the owner of the goods.
- Sale under Voidable Title. 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 if he buys them in a good faith
- Sale by Mercantile Agent. A mercantile agent acting in the ordinary course of business can give a good title to the bona fide purchaser of goods
- Sale by Buyer in Possession. Where a buyer having bought or agreed to buy goods obtains possession or title of the goods with the consent of the seller, sells or pledges them to a person who acts in good faith, obtains a good title to the goods.
- Sale by Seller in Possession. Where a seller after having sold the goods, continues to be in possession of the goods, or a document of title to the goods, and again sells them to a person who buys in good faith, he gets a good title.
- Sale under the Order of the Court. A court has wide powers to order the sale of goods, and any person who buys obtains a good title to them.
- Estoppel. The true owner may be estopped from denying the seller’s right if he allows an innocent buyer to pay the seller the price of the goods in the belief that he, the buyer, will become the owner of the goods.
- Market Overt. Market overt is every open public and legally constituted market. By section 22 of the English Sale of Goods Act ‘ where goods are sold in market overt, according to the usage of the market, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of any defect or want of title on the part of the seller.
NOTE: This rule of market overt does not apply to Kenya, because no such provision exist the Kenya Sale of Goods Act.