Ownership of goods under consumer law

Under the Sale of Goods Act 1979 the ownership (known as "title") to goods passes when the parties to the sale intend it to pass. This can be confusing as the parties may have very different views on when this should actually be.

This has led to widely used "retention of title" clauses - this is where the seller specifically states in their terms that title to the goods do not pass until they (the seller) have been paid in full.

There are other instances when title will not pass until certain events have taken place. For example, if part of the agreement is that the seller must do something to the goods before they are delivered, then ownership only passes when that agreed action has been carried out and the buyer has been told that it has been done.

If the seller is authorised or required to send the goods to the buyer, delivery of the goods to the carrier is not delivery of the goods to the buyer.

Deciding if ownership has passed to the buyer can be very important in for example a situation where the seller goes bankrupt during the agreement.

Ownership can also be important in cases where the seller has no right to sell the goods. The seller with no title to the goods cannot pass ownership to the buyer.

There are exceptions to this:

If the seller sells a car, which is under a HP agreement then as long as the buyer is a private individual and not a trader and did not know the car was under a HP agreement, ownership will pass to the buyer.

Another example is if the owner allowed the seller to give the impression that he was the true owner and this fooled the buyer, then ownership will pass to the buyer. Also if the seller was acting on behalf of the owner, then again ownership will pass to the buyer.

These are just some of the examples of when ownership may pass to the buyer even though the seller did not have proper title to the goods.

Credit Agreements & Hire Purchase under consumer law

Consumer Law

 

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