FACULTY OF BUSINESS & MANAGEMENT

BUSINESS LAW

LAW 416

ASSIGNMENT 3

PREPARED BY:

MOHAMAD ASYRAAF BIN MD SAID

ID STUDENT:

2019982521

PREPARED FOR:

MISS NORLIYANA ABDUL MANAF

SUBMISSION DATE:

23/01/2021
“Section 27 of the Sale of Goods Act 1957 provides that “... where goods are sold by a
person who is not the owner, the buyer acquires no better title to the goods than the
seller had ...”
Explain the above provision and its exceptions..”

Section 27 deals with the sale by a person who is not the owner. Imagine a sale contract where
the seller Is not the owner of the goods. He or she does not have consent from the owner to sell the
goods and has not been given authority by the owner to sell the goods on his behalf. In such situations,
if the behaviours of the owner prevent the seller's authority to sell, the buyer acquires no better title
to these goods than the seller had. Let us see an instance. Peter robs his office of a cell phone and sells
it to John, who buys it in good faith. John will not get the phone's title, though, and will have to refund
it to the owner when he demands.

Therefore, to protect the interest of the buyers, certain exceptions are provided. The first is
Sale by a Mercantile agent that was considered a business agent who, with the permission of the
owner, is in possession of the goods or a document giving title to the goods. When acting in the usual
course of business of a mercantile agent, such an agent may sell the goods. If the buyer acts in good
faith and has no reason to believe that the seller has no right to sell the goods, the transaction is
legitimate. Then we have Sale by one of the Joint Owners. In many cases, the goods are jointly owned.
In many cases, with the permission of the co-owners, the goods are kept by one of these co-owners.
If this person (the only owner of the goods) sells the goods, the property in the goods will be
transferred to the buyer. The premise is that the buyer acts in good faith and there is no reason to
believe that the seller has no right to sell the goods. As example, Peter, John and Oliver are three
friends. They bought a 42-inch TV to watch the upcoming Cricket World Cup. They unanimously
decided to put the TV in Oliver's house. After the World Cup, the TV is still at his home. One day, Julia,
a colleague in Oliver's office, visited his house and sold the TV to her. She bought it sincerely and did
not know that it was purchased together. In this case, she won a good title on TV.

Third, the sale under a voidable contract, a person who has obtained the ownership of certain
goods under a contract and voids it on the grounds of coercion, misrepresentation, fraud or undue
influence. If this person sells the goods before the original owner of the contract terminates the
contract, then the buyer will obtain ownership of the goods. Example: Peter fraudulently obtains a
gold diamond ring from Olivia. Olivia can void the contract whenever she wants. Before she realizes
the fraud, Peter sells the ring to Julia – an innocent buyer. In this case, Olivia cannot recover the ring
from Julia since she did not void the contract before the sale was made.
 Then, the estoppel If the owner of the goods is subject to these behaviours by refusing the
seller’s right to sell, the buyer will get good ownership. However, in order to obtain a good title
through irony, it is necessary to prove that the original owner had actively suffered as a person
authorized to sell the product or rejected the seller. Let us look at an example. Peter, John and Oliver
are all talking. Peter tells John that he owns a BMW parked nearby, which belongs to Oliver. However,
Oliver remained silent. Subsequently, Peter sold the car to John. In this case, even if the seller is Peter
without a title, John will get a good title. This is because Oliver's actions did not deny Peter's right to
sell cars.

The sale by a seller in possession after sale, consider a person who has sold goods but
continues to own the goods or certificates of title. This person may sell goods to other buyers. If the
buyer acts in good faith and is unaware of the earlier sale, even if the property of the goods has been
transferred to the first buyer, he will enjoy good ownership of the goods. The pledge or other
disposition of the goods or ownership documents by the owned seller is also effective.

Finally, the sale by a buyer in possession after sales Consider a buyer who, with the seller's
permission, obtains ownership of the property before the goods are transferred to him. He can sell,
mortgage or dispose of the goods to others. If the second buyer obtains the delivery of the goods in
good faith without notifying the original seller of the lien or any other rights, he will obtain good title
to the goods. This rule does not apply to hire purchase agreements that allow individuals to own goods
and choose the right to purchase. As example, Peter takes a car from John under the conditions that
he will pay RM 3,000 every month as rent of the vehicle and that he can choose to purchase it for Rs.
100,000 to be paid in 24 equal instalments. Peter pays RM3,000 for three months and then sells the
car to Oliver. In this case, John can recover his car from Oliver since Peter had neither purchased the
car nor agreed to purchase it. He only had an option to buy the car.
 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : MOHAMAD ASYRAAF BIN MD SAID

Student’s ID : 2019982521 Student’s I/C No. : 970328-06-5535

Program Code : BA 243 Part : 4 Course Code : LAW416

Course
Name : BUSINESS LAW

Assignment/ Due Submission

Project No. : 3 Date : 23/01/2021 Date : 22/01/2021

Assignment/
Project Title : ASSIGNMENT 3 BUSINESS LAW

Lecturer’s Name : MISS NORLIYANA ABDUL MANAF

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Bachelor Degree students, regulating the conduct of my study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college
in Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

22/01/2021

Date Student’s Signature