The literal translation of the rule ‘nemo dat quad non habet’ is that no one can give what he has not. However, there are exceptions to this rule.
Discuss the exceptions to the nemo dat rule
Exceptions to the nemo dat rule:
- Sale under voidable title/sale under statutory power: When the seller of the goods has a voidable title to them, but his title has not been avoided at the time of the sale, the buyer acquires a good title.
- Sale by a mercantile agent/factor: A mercantile agent, acting in the ordinary course of business, can give a good title to the purchaser of goods provided the purchaser receives them in good faith and without notice of any lien.
- Sale by buyer in possession: Where a. buyer, having bought or agreed to buy goods, obtains possession or title of the goods with the consent of the seller.
- Resale by seller in possession: Where a seller, after having sold the goods, continues to be in possession of the goods, or a document of title to the goods, and again sells them or pledges the same.
- Title by estoppel: In a contract of sale, estoppel may arise where the owner by an act or omission leads the buyer to believe that the seller has the right to sell.