Question

A finds a ring of B and sells it to a third person who purchases it for value and in good faith. Which of the following is correct?

• A. In the given case, sale by A to third person is valid as under of goods can treated as owner.
• B. In the given case, sale by A to third person is valid as A has implied power given by the law to sell the goods found.
• C. In the given case, sale by A to third person is not valid as A has no title.
• D. In the given case, sale by A to third person is not valid as A has no title. B can recover ring from third person and such third person can recover damages from A.

Answer 1

Answer: (D)

In the given case, sale by A to third person is not valid as A has no title. B can recover ring from third person and such third person can recover damages from A.

Section 27 of Indian Contract Act, 1872 states, "Agreement in restraint of trade, void. Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void."