Skip to content

CA Foundation · Business Laws · The Sale of Goods Act, 1930

Dinesh, a mercantile agent in possession of Kavita's goods with her consent, sells them in the ordinary course of business to Arjun, who buys in good faith without knowing of any lack of authority. What is Arjun's position?

Arjun gets a good title. A mercantile agent in possession of goods with the owner's consent can pass valid title if he sells in the ordinary course of business and the buyer acts in good faith without notice of any lack of authority.

  1. AHe gets no title because Dinesh was not the owner
  2. BHe gets a good title, as the sale is valid despite the agent's lack of authorityCorrect
  3. CHe gets title only if Kavita ratifies the sale
  4. DHe gets title only if he paid more than market price

Explanation

A mercantile agent in possession of goods with the owner's consent, selling in the ordinary course of business to a buyer acting in good faith without notice, passes a good title. The exception to nemo dat applies, so Kavita's ratification is not needed.

Did you get it right without looking?

One question tells you little. A timed set on The Sale of Goods Act, 1930 shows your real accuracy, how long you take and where you lose marks.

Practise The Sale of Goods Act, 1930Free diagnostic mock

More The Sale of Goods Act, 1930 questions