Questions Problem Question Hyde decided to change his 2005 Vauxha...
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Questions
Problem Question
Hyde decided to change his 2005 Vauxhall Astra for a 2009 Ford Fiesta then standing in the showrooms of Wrench, a local car dealer. Wrench persuaded Hyde that he would get a better price for the Astra if, instead of trading it in, he allowed Wrench to effect a sale to a private buyer. Accordingly, Hyde left the Astra with Wrench to see what offers Wrench could obtain, but said: “Don’t sell for less than £4000”. Without referring back to Hyde, Wrench sold the Astra at the local car auction to Len for £250 (this sum is considerably lower than the acknowledged pre-owned value for that vehicle). Hyde was furious and at first refused to take Wrench’s cheque. When he decided to do so, it was dishonoured because Wrench had petitioned for bankruptcy.
Meanwhile, Hyde had agreed to take the Fiesta under a directly financed conditional sale from Moros Finance Ltd paying a £2000 deposit to Wrench. However, less than a month after taking delivery, Hyde received a demand from Vulture Finance Ltd that the Fiesta be handed over to them. It transpired that the Fiesta was leased to Wrench by Vulture Finance for his own personal use under a contract which allowed Wrench to purchase it at the expiry of the five-year lease for its then market value.
Discuss critically.
Problem Question
Hyde decided to change his 2005 Vauxhall Astra for a 2009 Ford Fiesta then standing in the showrooms of Wrench, a local car dealer. Wrench persuaded Hyde that he would get a better price for the Astra if, instead of trading it in, he allowed Wrench to effect a sale to a private buyer. Accordingly, Hyde left the Astra with Wrench to see what offers Wrench could obtain, but said: “Don’t sell for less than £4000”. Without referring back to Hyde, Wrench sold the Astra at the local car auction to Len for £250 (this sum is considerably lower than the acknowledged pre-owned value for that vehicle). Hyde was furious and at first refused to take Wrench’s cheque. When he decided to do so, it was dishonoured because Wrench had petitioned for bankruptcy.
Meanwhile, Hyde had agreed to take the Fiesta under a directly financed conditional sale from Moros Finance Ltd paying a £2000 deposit to Wrench. However, less than a month after taking delivery, Hyde received a demand from Vulture Finance Ltd that the Fiesta be handed over to them. It transpired that the Fiesta was leased to Wrench by Vulture Finance for his own personal use under a contract which allowed Wrench to purchase it at the expiry of the five-year lease for its then market value.
Discuss critically.
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The general principle nemo dat quod non habet which means that no one can transfer what he has not got and where a party purports to sell goods which he does not own or have the right to sell the law protects the true owner of the goods and the innocent purchaser gets nothing.
The concept of nemo dat quod non habet as contained in Section 21(1) of the Sale of Goods Act 1979 gives certain exceptions to the rule which states that ‘subject to this Act, where goods are sold by a person who is not their owner, 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 than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell’.
Section 21(1) therefore by implication includes a number of exceptions to the nemo dat quod non habet rule, namely those of agency where the seller is acting in a procurist capacity or on the consent of the owner and in such cases where the owner of the goods, by his conduct is estopped from denying the sellers authority to sell
The general principle nemo dat quod non habet which means that no one can transfer what he has not got and where a party purports to sell goods which he does not own or have the right to sell the law protects the true owner of the goods and the innocent purchaser gets nothing.
The concept of nemo dat quod non habet as contained in Section 21(1) of the Sale of Goods Act 1979 gives certain exceptions to the rule which states that ‘subject to this Act, where goods are sold by a person who is not their owner, 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 than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell’.
Section 21(1) therefore by implication includes a number of exceptions to the nemo dat quod non habet rule, namely those of agency where the seller is acting in a procurist capacity or on the consent of the owner and in such cases where the owner of the goods, by his conduct is estopped from denying the sellers authority to sell
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