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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

Ravi sells his scooter to Mohan but keeps it in his garage with Mohan's agreement. Ravi then sells the same scooter to Suresh, who pays and takes delivery in good faith without knowing of the first sale. What is the legal position under the Sale of Goods Act, 1930?

Suresh obtains a good title. A seller who stays in possession after the sale can pass a valid title by delivering the goods under a further sale to a buyer who acts in good faith and has no notice of the earlier sale, as if the owner had authorised it.

  1. ASuresh gets a good title, as the delivery by Ravi has the same effect as if the owner had authorised itCorrect
  2. BSuresh gets no title because Ravi had already sold the scooter to Mohan
  3. CSuresh gets title only if Mohan consents to the second sale
  4. DThe second sale is void because a person cannot sell goods twice

Explanation

Where a person, having sold goods, continues in possession of them, a delivery by him under any sale to a person receiving it in good faith and without notice of the previous sale has the same effect as if the owner had authorised it. Suresh meets both conditions. The option denying title ignores this exception to the nemo dat rule.

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