Appraising the Market Overt Exception

Ji Lian Yap


Under what circumstances can a sale of goods by a person, who is not the owner of
the goods, nonetheless confer good title on the purchaser? The common law rule “nemo dat quod
non habet†embodies the principle that the transferee of goods cannot get better title than that of the
transferor. In other words, if goods are sold by a person who does not have title to the goods (for
example, because he had obtained the goods by theft), then he would be unable to pass title to a
subsequent purchaser since he did not have title to begin with. The nemo dat rule thus protects the
true or original owner of goods. One of the exceptions to this rule under the Hong Kong Sale of
Goods Ordinance is the market overt exception, which seeks to protect innocent purchasers. This
article first considers the meanings of and rationales behind the nemo dat rule and the market overt
exception respectively. Problems with the existing market overt exception will next be discussed. A
suggestion will then be made that the market overt exception be replaced with a rule that protects
innocent buyers who deal as consumers and who have purchased goods from shops or markets in
Hong Kong.


Market Overt, Nemo Dat Rule, Sale of Goods, Consumer Protection, Hong Kong.

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