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Contract and Commercial Law Act 2017

Other commercial matters - Mercantile agents - Sales, pledges, and other dispositions by mercantile agents

298: Buyer, etc, has notice of lack of authority if goods subject to perfected security interest

You could also call this:

“Buyer should check if the seller really owns the goods”

You need to know about a rule that applies when someone called a mercantile agent has goods or papers about goods. This rule is important when the owner has agreed to let the agent have these things, and when someone else has a special right over the goods called a perfected security interest.

If you take these goods from the mercantile agent, the law says you should know that the agent might not have the right to give them to you. This means you can’t just assume the agent is allowed to sell or give away the goods.

However, if someone can prove that the agent really did have the right to give away the goods, then this rule doesn’t apply. In that case, you wouldn’t be in trouble for taking the goods from the agent.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844641.

Topics:
Business > Fair trading Business > Industry rules Money and consumer rights > Consumer protection
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297: Sale, pledge, or other disposition by agent in possession with owner’s consent is valid, or

"Agent can sell or promise owner's stuff if they have permission"

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299: Effect of withdrawal or expiry of owner’s consent, or

"What happens when the owner changes their mind about letting someone sell their stuff"

Part 5 Other commercial matters
Mercantile agents: Sales, pledges, and other dispositions by mercantile agents

298Buyer, etc, has notice of lack of authority if goods subject to perfected security interest

  1. This section applies if—

  2. a mercantile agent is, with the consent of the owner of goods, in possession of the goods or of documents of title to the goods; and
    1. those goods are subject to a perfected security interest under the Personal Property Securities Act 1999.

      1. A person who takes the goods under a disposition made by the mercantile agent must be treated as having notice that the agent has no authority to make the disposition.

      2. Subsection (2) does not apply if it is proved that the authority did exist.

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