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Question
Legal Principle: An essential condition in a contract for the sale of goods is that the seller has title over the goods sold.
Fact Situation: Ranjan pays rupees two thousand and buys a watch from Mohit who runs a watch showroom and a repair shop. Jatin sees the watch with Ranjan and tells him that it is his watch and was only given to Mohit for repairs. If what Jatin says is true
Which of the following statements is the most appropriate in relation to the legal principle stated above?
Options
Ranjan is now the owner of the watch since he paid rupees two thousand for it.
Ranjan is not the owner of the watch since Mohit did not have a title to it.
Mohit must pay Jatin rupees two thousand since he sold Jatin’s watch.
Mohit is the owner of the watch since he sold it to Ranjan.
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Solution
Ranjan is not the owner of the watch since Mohit did not have a title to it.
Explanation:
Rules as to title: There is an implied condition on the part of the seller that, in the case of a sale, he has the right to sell the goods, and in the case of an agreement to sell, he will have the right to sell the goods when the property is to pass. Thus if the seller has no title to the goods, the buyer can reject the goods, or if he has taken possession of the goods and is deprived of it by the real owner, the buyer can recover the full price of the goods even if he has made use of them. A bought a motor-car from and used it for 4 months. B had no title to the car because he has obtained the possession by theft and consequently A had to surrender it to the real owner. A was entitled to recover from B the full price even though he used the car for 4 months. (Rowland Vs. Divall). Hence option (b) is the most appropriate. Mohit did not have title to the watch so he can not pass it to Ranjan so neither Mohit nor Ranjan is the owner of the watch.
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