Transfer of Title, Caveat Emptor, and UCC § 2-403 Flashcards

Vocabulary flashcards covering caveat emptor, voidable title, apparent authority, bailment, and UCC § 2-403 rules based on the lecture notes.

Caveat Emptor

The basic rule under common law that a purchaser acquires only the title their transferor had or had power to transfer.

Voidable Title

A title arising from a consummated sale where the owner, though deceived (e.g., identity fraud), intended to part with title, allowing the deceiver to transfer good title to a bona fide purchaser prior to rescission.

Apparent Authority

An exception to caveat emptor arising when an owner's affirmative acts or knowing acquiescence clothe another with the appearance of ownership or authority to sell, inducing reasonable reliance by a bona fide purchaser.

Bona Fide Purchaser (BFP)

A good-faith purchaser for value who buys without notice that the sale violates another's rights, taking reasonable steps and lacking knowledge of title defects.

Bailment

A transaction where an owner gives possession of property to a bailee without transferring title, requiring the bailee to return or deliver as directed without authority to sell.

Equitable Estoppel

An equity-based principle requiring an owner's conduct creating an appearance of authority or a sale, and a buyer's good-faith reliance without notice.

UCC § 2-403(1)

A statutory provision codifying the shelter rule and expanding voidable title to cover identity deception, dishonored checks, cash-sale nonpayment, and larceny where a sale occurred.

Entrustment Doctrine

Under UCC § 2-403(2)–(3), the rule where delivering possession to, or knowingly acquiescing in possession by, a merchant of goods of that kind empowers the merchant to transfer all rights of the entruster to a buyer in ordinary course.

Buyer in Ordinary Course of Business

A person who buys in good faith, without knowledge that the sale violates the rights of another, from a merchant of goods of that kind in the ordinary course of business.

Phelps

A key case originating the concept of voidable title from a consummated sale where an owner, though deceived as to identity, intended to part with title.

Bear v. Clark

A case holding that delivering property under fixed terms without a sale created a mere bailment, and possession alone did not create apparent authority, allowing the owner to replevy.

O’Connor v. Clark

A case illustrating apparent authority where an owner's affirmative act of placing 'George Tracy Piano Mover' on a wagon could create apparent ownership.

Zendman

A case establishing that an owner's inaction and knowing acquiescence to an agent displaying jewelry for sale contrary to instructions creates apparent authority and estopped the owner.

Shelter Rule

The rule codified under UCC § 2-403(1) stating that a purchaser acquires all title that their transferor had or had power to transfer.

Entruster

The party (either an owner or a non-owner such as a thief, finder, or bailee) who delivers or knowingly acquiesces in possession of goods to a merchant under UCC § 2-403(2)–(3).