RIGHTS OF BONA FIDE PURCHASERS: LEGAL IMPLICATIONS OF TITLE TRANSFER IN SALE OF GOODS

The Sale of Goods Act, 1930, establishes the legal rights, obligations, and liabilities in commercial transactions, particularly regarding the transfer of title. Under Sections 27-30, the Act follows the principle of Nemo dat quod non habet—a seller cannot transfer a better title than he possesses. If the seller’s title is defective, the buyer’s title is also defective. For instance, if a thief sells a stolen car, the buyer acquires no valid title. However, exceptions exist under the Sale of Goods Act and the Indian Contract Act, allowing a buyer to obtain a good title despite the seller’s defective ownership. These exceptions protect bona fide buyers and facilitate smooth transactions while preventing fraud. This article examines the concept, its exceptions, and their significance in legal contexts.