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CSEET · Business Laws and Management · Elements of Law relating to Sale of Goods

Anil leaves his scooter with Dev, a mercantile agent, with his consent for sale. Dev, acting in the ordinary course of business of a mercantile agent, sells it to Prem, who acts in good faith and has no notice of Dev's lack of authority. Anil had not authorised this particular sale. What is Prem's position?

The sale is as valid as if Dev were expressly authorised by Anil. Under the proviso to Section 27, a mercantile agent in possession with the owner's consent, selling in the ordinary course of business to a good-faith buyer without notice, passes a valid title.

  1. AThe sale is as valid as if Dev were expressly authorised by AnilCorrect
  2. BPrem acquires no better title than Dev had
  3. CThe sale is void because Anil did not authorise it
  4. DPrem gets title only after Anil ratifies the sale

Explanation

The proviso to Section 27 says that where a mercantile agent is, with the owner's consent, in possession of the goods, a sale made in the ordinary course of business is as valid as if expressly authorised, provided the buyer acts in good faith without notice. All conditions are met here, so the general rule of no better title does not apply.

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