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Dev held property as an obligor for Esha. In breach of his duty, he sold it to Farhan, who paid a fair price and had no notice of Esha's claim. Esha now seeks to recover the property from Farhan. How does the Act treat the claim?

Farhan's rights are protected. The Act says nothing in the Chapter impairs the rights of transferees in good faith for consideration. Farhan paid a fair price without notice, so even though Dev was bound like a trustee, Esha cannot defeat Farhan's title.

  1. AEsha can recover it because Dev was treated as a trustee.
  2. BEsha can recover it only if she pays Farhan double the price.
  3. CEsha can recover it because a sale by a trustee is always void.
  4. DThe Chapter does not impair the rights of transferees in good faith for consideration, so Farhan's rights are protected.Correct

Explanation

Section 96 says nothing in the Chapter impairs the rights of transferees in good faith for consideration. Farhan paid a fair price and had no notice, so he is such a transferee. The treatment of Dev as a trustee under Section 95 does not override this protection, which defeats the option saying the sale is void.

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