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The basic rule

Nemo dat, or more fully nemo dat quod non habet, is Latin, and can be translated as “you can’t give what you don’t have”. This maxim stands when trading property in goods. If a person doesn’t have good title to goods, they cannot sell that title, and both the seller and purchaser will be liable in conversion. This maxim should be balanced with the rights of a ban fide purchaser, however. According to Bishopsgate Motor Finance Corp v Transport Brakes [1949], a bona fide purchaser ought to get good title from a person without such a title. And although not authority, Lickbarrow v Mason (1787) suggests that whoever enables a fraud (which doesn’t transfer good title) should stand the cost of that fraud.

Today, the nemo dat maxim has been codified in section 21 of the Sale of Goods Act 1979 (SGA), stating that:

“Subject to this Act, where goods are sold by a person who is not their owner, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell.”

The phrase, “subject to this act”, is of particular importance here, as there are currently 7 exceptions to this basic rule, each of which will now be discussed in turn...

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