The Sale of Goods Act of 1930 had a major impact on the contracts established
with both buyers and sellers of goods because it established a number of new
principles and rules to safeguard both buyer and seller's rights. Section 18 to
30 of the Sales of Goods Act
specifically address the contract's effects on
the transfer of property between the seller and the buyer. One of the principles
is Nemo Dat Quod Non-Habet
, which literally translates to no one gives
what he does not have.
The Nemo dat quod non-Habet is important in determining the
rights to ownership, possession, property, and commercial goods that are covered
by contract law when it comes to title transfer. The usage of the Nemo Dat Quod
Non-Habet rule in current laws, as well as exceptions to the rule, are the
subject of this critical essay.
Nemo Dat Quod Non-Habet
Section 27 Sale by person, not the owner Subject to the provisions of this
Act and of any other law for the time being in force, where goods are sold by a
person who is not the owner thereof 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 sellers authority to sell.
Where a mercantile agent has possession of the goods or a document of title to
the goods with the consent of the owner, any sale made by him in the ordinary
course of business of a mercantile agent shall be as valid as if he had been
expressly authorized by the owner to make the sale, given that the buyer acts in
good faith and has not received notice from the seller that he or she does not
have authority to sell at the time of the contract of sale.
Basically, Section 27
attempts to protect the true owner's interests by
When goods are sold by someone who is not the owner and who does not sell them
under the authority or even with the knowledge of the client, the buyer inherits
no better ownership of the goods than the seller.
The case of Greenwood v Bennett
. In this case, the rightful owner of a
Jaguar car (Bennett) assigned it for repairs to a man named Searle. Searle then
took the car and used it for his own purposes, crashing it and causing
significant damage. For £75 (pounds), Searle sold the car to Harper, who owned a
garage. Harper had no idea that Searle was not the car's owner. Harper then
invested £226 (pounds) on repairs before selling the car to a mortgage lender.
The court determined that the car belonged to Bennett because Searle did not
have title and thus could not transfer it to Harper. Harper was unable to
transfer title to the finance company for almost the same reason. Bennett was
able to restore the car, but he also had to pay Harper for the stuff he's done
The case of Life Insurance Corporation vs United Bank of India Ltd. And
Anr, the Indian court held that while an actionable claim is transferable
under Indian law, it can only be transferred by the person who owns the property
on which the claim is based. And this is same in English law also.
No one gives what he does not have, according to Nemo rule, if the nominee has
no right, title, or interest in the policy money, he cannot surrender the policy
or assign any right, title, or interest in the policy money. The right of a
nominee is merely a right to collect the proceeds of the policy in the eyes of
the statute, and the right has been granted only to avoid the inconvenience of
obtaining representation for the estate of the deceased policy-holder or a
Lets look at exceptions to this rule:
- Title transfer by Estopple:
A purchaser can obtain a good title if
the owner of the goods is precluded from refusing the seller's authority to
sell by his action, according to Section 27. When the owner is unable to refuse
the seller's authority, estoppel against him occurs. The seller's representation
that he or she has the authority to sell creates estoppel.
Estoppel arises from one of the following:
- An act or omission but it must be a legal obligation.
- negligence but not just any negligence, but negligence in relation to
The case of K. M. Mohambaram v. Ram Narayan Brahmin.
A was appointed as
the bus owner's agent to operate the bus for hire. He left a signed letter to
the District Magistrate requesting that G permit be granted to A. A
defrauded the bus owner by altering the letter and addressing it to the DSP,
requesting him to transfer the registration in As name. A did the same
thing, selling the bus to a third party who had no knowledge of A's
authority to sell. The buyer's title was challenged by the original bus
owner. It was decided that A could not have predicted that he would commit
such forgery. He was not barred from contesting the buyer's title under
Section 27 of the SOGA.
- The Sale by A Mercantile Agent given under Section 27
If a mercantile agent has the authority to sell goods and does so, there is no
problem because, in general, an agent with the authority to sell can convey a
good title. The issue starts when the mercantile operative deprives of the goods
Section 2(9) defines the term mercantile agent. A mercantile agent who has
the authority to sell goods, consign goods for the purpose of sale, buy goods,
or collect money on the security of goods in the ordinary course of business. In
other words, a mercantile agent is someone who has goods or documents in their
In Folker v. King case, the plaintiff gave his car to a mercantile agent
with the intention of selling it for at least 575 pounds. The mercantile agent,
on the other hand, misappropriated funds by selling them to the defendant for
pounds 140. The defendant (a buyer) was found to have good title to the product
in a plaintiff's action.
The goods must be entrusted to the mercantile agent in his capacity as a
mercantile agent; if the goods are entrusted to him in any other capacity,
he will not be able to convey a good title. In the case of Staffs Motor Guarantee Ltd v. British Wagon Ltd, this was decided. Under a
hire-purchase agreement, a used car dealer sold his lorry to a corporation and
promptly returned it to the company.
- The Sale by joint owner given under Section 28:
If among the many joint owners of goods, gains sole possession of the goods
with the consent of both co-owners, the property in the goods is transferred
to anyone who buys them in good faith from that joint owner without knowing
that the seller lacks authority to sell. If Section 28 had not existed, the
consumer would have received only co-ownership titles and would have been a
co-owner with another co-owner.. As a result, the clause is a legal
exception no one may offer what he does not possess.
- The Sale by A Person in Possession Under A Voidable Contract under
Contract Act's Sections 19 and 19-An express that if a party agree to an
agreement is procured through pressure, extortion, error, or unjustifiable
impact, the agreement is voidable at the party's prudence. In the event that an
individual gets ownership of products under an agreement that is voidable under
segment 19 or 19 An of the Contract Act and sells those merchandise before the
agreement is forestalled by the gathering qualified for do as such, the
purchaser of those products gets a decent title to them, as per segment 29. It
is important, nonetheless, that such a purchaser bought the products in
accordance with some basic honesty and without information on the vender's title
In the case of Phillips v. Brooks (1919)
A fraud was committed when a
person purchased a valuable ring with a worthless check while posing as a
respectable individual. The ring was then pledged to another person. Following
the discovery of the fraud, the question of whether the pawnee was entitled to
keep the ring arose. The pawnee had a good title to the ring, according to the
Court, because he was unaware of the seller's defective title and acted in
- The Sale by The Seller in Possession under Section 30 (1):
The seller is no longer able to deal with the goods once they have been sold and
the buyer has taken possession of them. If he retains possession of goods and
deals with them, the buyer will sue him for exchange.
Sec 30 (1), on the other
hand, states that if the seller who sold the goods is still in possession of the
goods or the documents of title to them, the seller's or a Mercantile agent's
delivery or transfer of the goods or the documents of title to them under any
sale, promise, or another disposition thereof will convey a good title to the
buyer. Assuming the buyer is acting in good faith and is unaware of the
In the case of Staffs Motor Guarantee Ltd v. British Wagon Co Ltd (1934)
A who was the lorry owner, sold his lorry to the defendant. Later, he bought
the lorry on hire-purchase from the defendant and resold it to the plaintiff.
The plaintiff did not have a good title to the lorry, according to the Court,
because A had already sold it to the defendant, and when he sold it to the
plaintiff, he did so as a bailee, not as a seller. As a result, the exception
will not be enforced. If the defendant had sold the vehicle to the
plaintiff, the plaintiff would have had a good title to the vehicle.
- The Sale by the Buyer in Possession under Sec 30(2)
This provision says that if a customer obtains possession of goods or the terms
of the contract to them with the seller's consent, any sale, pledge, or other
disposition of those goods to any person will convey good title without regard
to any lien or other right of the original seller.
- Resale by An Unpaid Seller under Sec 54(3):
If an unpaid seller has practiced his right of lender or obstruction in transit
and the buyer fails to pay him, he has the right to possess the goods after
offering the purchaser notice, according to this section. When such a notion is
not provided, the seller will not be able to recover any losses from the buyer
if the goods sell for less than the contract price, nor will he be able to keep
the value if the goods sell for more.
- The Sale by Finder of Goods Sec 169, Indian Contract Act:
The finder of goods often has the same liability as the bailee, according to
Section 71 of the Indian Contract Act. He must treat the goods with reasonable
care while they are in his custody and revert back them once the owner has been
verified. Nevertheless, if the owner cannot be recognized with sufficient
certainty or fails to pay the finder's legitimate fees, the finder may sell the
goods, according to Section 169 of the ICA.
- The Sale by Pawnee Sec 176 Of Indian Contract Act
If the Pawnor fails to pay the debt, the Pawnee has the option to sue him or
sell the goods pledged after giving the Pawnor reasonable notice of the sale.
The Nemo Dat principle in India is covered by the Indian Contract Act and the
Sale of Goods Act. It is a well-known fact that no one can transfer a higher
title than the one they currently hold, for the simple reason that they are not
authorized to do so. The principle of Nemo Dat quod non-habet, which translates
to no one can give what they don't have. It means that no one can transfer a
better title than he himself has in the context of the sale of goods.
principle is specifically addressed in sales of goods act between sections 27
and 32, and various exceptions were added to broaden the scope of the principle
and make it more compatible with the agreement of sales of property and goods.
- Kirume, M. (2021). Nemo dat quod non habet - Academike. Retrieved 29
April 2021, from https://www.lawctopus.com/academike/nemo-dat-quod-non-habet
- (2021). Retrieved 29 April 2021, from https://legislative.gov.in/sites/default/files/A1930-3_0.pdf
- 95 So. 159 (Ala. 1923)
- AIR 1970 Cal 513
- 158 Ind Cas 535, (1935) 69 MLJ 691
- 1923, 1 K.B 282
- 1919, 2 KB 243
- 1934, 2 KB 305