Asked by reddy chittamuru on Apr 28, 2024
Verified
Goods that have been entrusted to a merchant may be sold by that merchant even when the merchant has been told not to sell the goods, and when a merchant sells such goods to a buyer in the ordinary course of business, that buyer has title that is superior to the title of the original owner who entrusted them to the merchant.
Superior Title
A legal concept indicating a party's ownership claim to property or land is stronger or more valid than others' claims.
Entrusted Merchant
A merchant who is given possession of goods with the trust that they will manage them responsibly and legally on behalf of another party.
Original Owner
The first individual or entity to possess an item or property, having lawful claim from the time of acquisition.
- Identify the implications of entrusting goods to a merchant.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
True
Explanation :
Under the Uniform Commercial Code (UCC) in the United States, when goods are entrusted to a merchant who deals in goods of that kind, the merchant has the power to transfer all rights (title) in the goods to a buyer in the ordinary course of business, even if the merchant was instructed not to sell the goods by the original owner. This rule is designed to protect buyers and promote trust in commercial transactions.
Learning Objectives
- Identify the implications of entrusting goods to a merchant.