Module 4

Title and the good-faith purchaser: nemo dat, the exceptions, void and voidable title, documents of title and how civil-law systems protect buyers

A buyer pays a fair price for a lorry, uses it for a year, and then a finance company turns up and says that it owns the lorry and the dealer had no right to sell it. The buyer did nothing wrong. Nor did the finance company. One of them must lose, and the law has to choose. This is one of the oldest conflicts in commercial law, between the security of ownership (an owner should not lose property without consent) and the security of commerce (a buyer should be able to trust a seller who looks like an owner). Common-law systems favour the owner by default and then carve out exceptions for the buyer. Civil-law systems often do the opposite. This module sets out the default rule, the exceptions and the reasoning that connects them.

General education on commercial law and secured transactions, using invented businesses, people and figures. It states common principles in simplified form and does not describe any one country’s law, which differs and changes; rules on sale, security, registration and priority are strict and local. It is not legal advice. Consult a qualified lawyer in the place that matters.