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

Ramesh leaves his scooter with Suresh, a mercantile agent, with his consent for sale purposes. Suresh, acting in the ordinary course of business of a mercantile agent, sells it to Tarun, who acts in good faith and has no notice of any lack of authority. Tarun's position is:

Tarun gets a valid title. Under the proviso to Section 27, a mercantile agent in possession with the owner's consent who sells in the ordinary course of business binds the owner, provided the buyer acts in good faith and has no notice of any want of authority.

  1. AHe gets no title because Suresh was not the owner
  2. BHe gets no title unless Ramesh ratifies in writing
  3. CHe gets a valid title as if Suresh were expressly authorised by RameshCorrect
  4. DHe gets a title only after one year of possession

Explanation

The proviso to Section 27 makes a sale by a mercantile agent in possession with the owner's consent valid as if expressly authorised, when he acts in the ordinary course of business and the buyer is in good faith without notice. All conditions are met here. Option A ignores this proviso.

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