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Contract and Commercial Law Act 2017

Sale of goods - Effects of contract - Transfer of title

153: Seller in possession after sale

You could also call this:

“Rules for selling something you've already sold but still have”

If you sell something to someone, but you still have it or its papers, there are some rules to follow. Let’s say you’re the seller (we’ll call you A), and you’ve sold something to someone else (we’ll call them B). Even after selling it, you still have the thing or its papers. If you then sell, promise, or give away that same thing to another person (we’ll call them C), and C doesn’t know you already sold it to B, some special rules apply.

If C gets the thing or its papers and they didn’t know you already sold it to someone else, it’s like you had permission to sell or give it to them. This is true even though you already sold it to B.

But there’s an exception to this rule. If someone else has a special right to the thing (called a perfected security interest), and they said you could have it, then you can’t give it to C in the same way.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844349.

Topics:
Business > Fair trading Money and consumer rights > Consumer protection
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"When you buy something and sell it again before paying fully"

Part 3 Sale of goods
Effects of contract: Transfer of title

153Seller in possession after sale

  1. This section applies if—

  2. a person (A) has sold goods to another person (B); and
    1. A continues or is in possession of the goods or of the documents of title to the goods; and
      1. A, or a mercantile agent acting for A, delivers or transfers the goods or documents of title under any sale, pledge, or other disposition, or under any agreement for sale, pledge, or other disposition, to another person (C); and
        1. C receives the goods or documents in good faith and without notice of the previous sale to B.

          1. The delivery or transfer to C has the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the delivery or transfer.

          2. Subsection (2) does not apply to a delivery or transfer of goods or documents of title to the goods by a person who is, with the consent of the holder of a perfected security interest, in possession of the goods or documents of title to the goods.

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