Sale of Goods Act Section 27 — Sale by person not the owner
CHAPTER III EFFECTS OF THE CONTRACT — Transfer of title
Commercial / Corporate
Summary
Subject to what this Act and any other current law say, if someone who is not the owner sells goods, and that person is not acting with the owner's authority or consent, the buyer gets no better title to the goods than the seller had. This means the buyer cannot get a better ownership right than the seller possessed, unless the owner's own conduct stops the owner from denying the seller's authority to sell.
The proviso to this section covers a special situation involving a mercantile agent. If a mercantile agent is in possession of the goods or a document of title to the goods with the owner's consent, and the agent sells them in the ordinary course of business as a mercantile agent, that sale is as valid as if the agent had been expressly authorised by the owner to make it. This applies only if the buyer acts in good faith and, at the time of the contract of sale, has no notice that the seller lacks authority to sell.
Official Text
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 seller’s authority to sell:
Provided that, where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of the goods to make the same; provided that the buyer acts in good faith and has not at the time of the contract of sale notice that the seller has not authority to sell.