#20301 - L8. Nemo Dat Quod Non Habet - Commercial Sales Law Lecture Notes

L8. Nemo Dat Quod Non Habet

1. The Nemo Dat Principle

• The Rule: "Nemo dat quod non habet" means "nobody gives what they do not have".

• Statutory Basis: Section 21 of the Sale of Goods Act (SGA) 1979 confirms that when goods are sold by a non-owner, the buyer typically acquires no better title than the seller possessed.

• The Conflict: The law must choose between protecting the original owner's property rights or protecting an innocent buyer who purchased in good faith.

2. Exceptions to Nemo Dat (SGA s. 21)

Legal exceptions allow a buyer to gain valid title even when the seller did not own the goods.

A. Agency (s. 21)

• Title passes if the seller acted with the owner'sactual authorityor consent.

• It also applies where an agent exceeds their authority but possessesapparent authorityto sell.

B. Estoppel (s. 21)

• An owner is "estopped" (prevented) from denying the seller's authority if their own conduct led the buyer to believe the seller had the right to sell.

• Types of Representation:

  • By Conduct: For example, inEastern Distributors Ltd v Goldring.Note that mere possession is not enough to create estoppel (Central Newbury Car Auctions Ltd v Unity Finance Ltd).

  • By Words: Clear statements of authority.

  • By Negligence: A careless failure to act, though a failure to register a hire purchase agreement was held insufficient inMoorgate Mercantile Co v Twitchings.

• Requirements: The representation must be voluntary (Debs v Sibec Developments) and the buyer must have relied on it.

C. Special Powers of Sale (s. 21(2)(b))

• This preserves sales made under specific common law, statutory powers, or court orders.

3. Exception: Mercantile Agency (Factors Act s. 2(1))

A person buying from amercantile agentmay obtain good title if specific criteria are met.

Requirements for Valid Title Transfer

1. The Seller must be a Mercantile Agent: Defined as an agent who, in the customary course of business, has authority to sell, buy, or raise money on the security of goods.

2. Possession: The agent must possess the goods or documents of title at the time of sale (Beverley Acceptances v Oakley).

3. Owner’s Consent: Possession must have been gained with the owner’s consent.Consent is presumed unless proven otherwise and remains valid even if...