Meaning of Nemo Dat Quod Non Habet

The Latin maxim “Nemo dat quod non habet” means “no one can transfer a better title than he himself possesses.” This principle is recognized in the Sale of Goods Act, 1930, Section 27, which states that if a seller is not the true owner of goods, or does not have the authority to sell them, the buyer does not acquire a better title than that of the seller. This rule protects the rights of the true owner against unauthorized sales. For example, if a thief sells stolen goods, the buyer cannot obtain a valid ownership because the thief himself has no title to pass. The maxim upholds justice by preventing dishonest persons from creating valid ownership rights through unlawful transfers. However, the strict application of this rule can sometimes cause hardship to innocent buyers who purchase goods in good faith, leading the law to create certain exceptions.

Legal Principles and Exceptions

While Section 27 of the Sale of Goods Act, 1930 establishes the general rule of Nemo dat quod non habet, the Act also recognizes several exceptions where a non-owner can pass a valid title. These exceptions include: (1) Sale by a mercantile agent in possession of goods with the owner’s consent (Sec. 27, Proviso), (2) Sale by one of several joint owners in possession (Sec. 28), (3) Sale by a person in possession under a voidable contract before it is rescinded (Sec. 29), (4) Sale by a seller in possession after sale (Sec. 30(1)), and (5) Sale by a buyer in possession with the consent of the seller (Sec. 30(2)). These provisions protect the interests of innocent third-party buyers who purchase goods in good faith and without notice of the seller’s defect in title. Thus, the principle balances the rights of the true owner with commercial convenience.

Importance of the Rule

The Nemo dat rule is significant because it safeguards ownership rights while also providing certainty in trade. It ensures that ownership cannot be wrongfully transferred, thereby protecting owners against fraud or theft. At the same time, its exceptions acknowledge the practical realities of commerce, where goods often change hands rapidly. For buyers, the rule serves as a reminder to exercise due diligence before purchasing goods, while for sellers, it emphasizes the importance of lawful authority. By limiting the rights of unauthorized sellers, the law strengthens trust in commercial dealings. Hence, the doctrine acts as both a safeguard for owners and a guide for buyers, balancing fairness and commercial necessity.

Real-Life Example

Suppose Mr. A steals a car from Mr. B and sells it to Mr. C, an innocent buyer who pays full value in good faith. According to the rule of Nemo dat quod non habet under Section 27, Mr. C does not acquire a valid title, since A himself had no ownership rights. The true owner, B, can recover his car from C. However, if the car had been sold by a licensed mercantile agent who was in possession with B’s consent, C could acquire a valid title, provided he bought it in good faith without notice of fraud. This demonstrates how the general rule works in practice while also showing the importance of statutory exceptions in protecting innocent purchasers.

Mnemonic to Remember – “NO SALE”

Use NO SALE to recall the essentials of Nemo dat quod non habet:

• N = Nemo dat rule – No one can transfer better title than they have (Sec. 27).
• O = Owner’s rights are protected above all.
• S = Stolen goods – buyer gets no title.
• A = Agent exception – mercantile agent can pass good title.
• L = Lawful possession exceptions (voidable contract, joint ownership, seller/buyer in possession).
• E = Exceptions safeguard innocent buyers.

Think: “NO SALE without title – unless law creates exceptions.”

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