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

Rohan leaves his laptop with Meera, a mercantile agent, with his consent, for sale. Meera, acting in the ordinary course of business of a mercantile agent, sells it to Kabir, who acts in good faith and has no notice of any lack of authority. Rohan had told Meera not to sell below a fixed price, and she sold below it, which Kabir did not know. What is the position of Kabir's title?

Kabir gets a valid title. The mercantile agent was in possession with the owner's consent, sold in the ordinary course of business, and the buyer acted in good faith without notice of any lack of authority, so the sale is as valid as if expressly authorised.

  1. AKabir gets no title because Meera exceeded instructions
  2. BKabir gets a valid title as the proviso to the section on sale by a non-owner is satisfiedCorrect
  3. CKabir gets title only if Rohan ratifies the sale in writing
  4. DKabir gets title only if the laptop was a document of title

Explanation

The proviso to Section 27 validates a sale by a mercantile agent in possession with the owner's consent, acting in the ordinary course of business, if the buyer acts in good faith without notice of lack of authority. Kabir had no notice of the price restriction, so his title is valid. Ratification is not required.

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