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

Arun obtained a car from Bina by fraud, under a contract voidable for fraud, and sold it to Chetan. Bina had not rescinded the contract at the time of the sale. Chetan paid in good faith and without notice of Arun's defect of title. What is Chetan's position?

Chetan acquires good title. When a seller has possession under a contract voidable for fraud that has not been rescinded at the time of sale, a buyer who purchases in good faith and without notice of the defect obtains a good title to the goods.

  1. AHe acquires no title because Arun had a defective title
  2. BHe acquires good title to the carCorrect
  3. CHe acquires good title only if Bina later ratifies the sale
  4. DHe acquires title only if the price was paid in cash

Explanation

Under Section 29, if the seller obtained possession under a voidable contract that has not been rescinded when he sells, a buyer in good faith and without notice of the defect acquires good title. Chetan meets these conditions, so the general no-better-title rule does not defeat him.

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