Liability of a seller without the right to
sell
Terms implied by s. 12(1) and at common law
S. 12(1) SGA 1979
In every contract of sale, there is an implied term on the part of the seller that in the case of a
sale, he has a right to sell the goods, and in the case of an agreement to sell he will have such
a right at the time when the property is to pass.
So if goods are sold which turn out to have been stolen, the buyer is entitled to the return of the
whole of the purchase price.
[Karflex v Poole]
D1, who described themselves as the owners of a motor car, agreed to hire it to a C on the
terms that in consideration of an initial payment of £95, the hirer should have the option of
purchasing it at any time during the currency of the agreement on making certain agreed
payments.
Once C fell into arrears with his monthly payments, D1 re-took possession of the motor car
and commenced this action to recover agreed compensation.
But C ascertained that at the date of the agreement D1 were not in fact the owners of the
motor car, it having been sold to them by D2 who had no title to it.
Thus C counter-claimed for repayment of £95 paid by him on entering into the agreement.
Held: It was a condition of the agreement that D1 describing themselves as owners were
in fact the owners of the motor car and were capable of giving a good title to it to C
whenever he might choose to exercise his option to purchase, that this condition went to
the root of the contract.
D1 was not entitled to recover any damages and C was entitled to recover the amount
already paid by him.
*Niblett Ltd v Confectioners’ Materials Co Ltd+
A firm who dealt in confectioners' materials agreed in writing to sell condensed milk in tins
which bore labels with the word ‘Nissly’ on them.
Nestle Company noticed this and argued that this was a breach of its registered trade mark.
D was required to remove the name and brand in order to be able to sell the goods without
being sued by Nestle for infringement of trade mark.
Held: D was in breach of the implied condition set out in section 12(1) of the sales of good
Act.
A person who can sell goods only by infringing a trade mark has no right to sell, even
though he may be the owner of the goods.
sell
Terms implied by s. 12(1) and at common law
S. 12(1) SGA 1979
In every contract of sale, there is an implied term on the part of the seller that in the case of a
sale, he has a right to sell the goods, and in the case of an agreement to sell he will have such
a right at the time when the property is to pass.
So if goods are sold which turn out to have been stolen, the buyer is entitled to the return of the
whole of the purchase price.
[Karflex v Poole]
D1, who described themselves as the owners of a motor car, agreed to hire it to a C on the
terms that in consideration of an initial payment of £95, the hirer should have the option of
purchasing it at any time during the currency of the agreement on making certain agreed
payments.
Once C fell into arrears with his monthly payments, D1 re-took possession of the motor car
and commenced this action to recover agreed compensation.
But C ascertained that at the date of the agreement D1 were not in fact the owners of the
motor car, it having been sold to them by D2 who had no title to it.
Thus C counter-claimed for repayment of £95 paid by him on entering into the agreement.
Held: It was a condition of the agreement that D1 describing themselves as owners were
in fact the owners of the motor car and were capable of giving a good title to it to C
whenever he might choose to exercise his option to purchase, that this condition went to
the root of the contract.
D1 was not entitled to recover any damages and C was entitled to recover the amount
already paid by him.
*Niblett Ltd v Confectioners’ Materials Co Ltd+
A firm who dealt in confectioners' materials agreed in writing to sell condensed milk in tins
which bore labels with the word ‘Nissly’ on them.
Nestle Company noticed this and argued that this was a breach of its registered trade mark.
D was required to remove the name and brand in order to be able to sell the goods without
being sued by Nestle for infringement of trade mark.
Held: D was in breach of the implied condition set out in section 12(1) of the sales of good
Act.
A person who can sell goods only by infringing a trade mark has no right to sell, even
though he may be the owner of the goods.
