Topics: Contract, Competition, Marketing Pages: 7 (2373 words) Published: April 5, 2013
Q1 (a) What do you mean by “NEMO DAT QUOD NON HABET”? What are the exceptions to the general rule? Answer: Nemo dat quod non habet signifies that if you are not the legitimate owner of an item you are not justified to despatch it to anybody else as you cannot give something that does not belong to you, i.e. you do not have. This is designed to protect the true owners. If anybody is trying to sell an item without that legitimate owner's permission, however, that transaction is unlawful. This principle is clarified in Section 27 of the Sale of Goods Act which explains that anybody purchasing something without the consent of the legitimate owner only attains the same rights to an item as the dishonest seller. An unauthorised vendor only obtains the capacity to sell this item if the rightful owner is disallowed, by some behaviour, from giving permission to this unauthorised sale. Section 26 (1) of Sale of Goods Act states that a buyer from a non-owner obtains no better title than the seller had, epitomising the meaning under the nemo dat quod no habet principle. The Mercantile Law Amendment Act specifies that "document of title" includes a Bill of Lading or a Warehouse Receipt, or any delivery docket for goods as proof . The Sale of Goods Act 1994 also specifies that a seller has certain responsibilities which must be fulfilled before goods may be sold legally . A necessary clause in terms of businesses is the 'retention of title' clause which enables a seller to be able to retain title of goods until they have been paid for, e.g. an HP Agreement, providing additional security for the seller should the buyer cease to trade before they have paid for the goods. A badly worded clause can be retrieved but, to do so it would be classed as a Mortgage or a Charge and would require registering under Section 385 of the Companies Act 1985. If, for any reason, a Charge was not registered is would be void and could not, retrospectively, be enforced. To ensure that a seller has maximum protection from the 'retention of title' clause it is possible to register it as a precaution, although not practicable in everyday terms. These 'retention of title' clauses form part of any standard terms and conditions of sale. However, in the event of a dispute over two vendors selling to a single customer who subsequently goes into liquidation, a registered their clause would satisfy the liquidator and the seller's goods would be returned. Without registration the relevant legislation would be the Sale of Goods Act 1979. Certain requirements, however, are also required on the part of the seller according to the Sale of Goods Act. Section 13 of the Sale of Goods Act clarifies the Sellers position with respect to implied warranty of quiet possession which states that "unless the circumstances of the contract are such as to show a different intention," the seller has the right to sell the goods and the buyer is enabled to enjoy quiet possession of those same goods free from any impediment relating to any third party. Exemptions:

Mercantile Agent
One of the exemptions expresses the concept that the legitimate owner could be precluded from 'denying the seller authority to sell by his conduct', with further exemptions in terms of delivery or transfer by a seller in possession, or by a buyer [or his mercantile agent] in possession respectively , although the circumstances would need to be established before non-authority can be determined . The reason for this contretemps would be the disparity between a legitimate owner losing title without physical possession or transfer of goods and a buyer in possession . The nemo dat quod non habet principle may be applied in respect of the legitimate owner agreeing to sell goods, after which the Seller physically sells them to another purchaser . This last purchaser would receive title to the goods directly from the legitimate owner who initiates the chain of sale, even though the Seller had not actually acquired the...
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