Sales law and the negotiability of motor vehicles: a legal conundrum

• Published in: Legal studies (Society of Legal Scholars) Vol. 15; no. 1; pp. 14 - 34
• Main Author: Davies, Iwan R
• Format: Journal Article
• Language: English
• Published: Oxford, UK Blackwell Publishing Ltd 01-03-1995; Butterworth and Co; Cambridge University Press
• Subjects: Common law; Extinguishing; Property rights; Security
• ISSN: 0261-3875; 1748-121X
• DOI: 10.1111/j.1748-121X.1995.tb00050.x

The traditional common law analysis where a third party wishes to acquire an indefeasible interest in a chattel is to direct the latter to the ‘owner’, as the prerequisite for the enjoyment of most property rights depends upon our ability to acquire these from someone else. In this respect, the issue of whether a disposition constitutes the extinguishment of an interest in the chattel or whether a dealing raises priority questions is fundamental. Extinguishment issues go to rights of ownership, typically, where the property of A is misappropriated by a third party T who disposes of it to B, and the question of law is whether B prevails against A with its attendant consequence of extinguishing A's title. In contrast, a priority dispute arises where there are competing security interests in the same chattel which may be resolved either through a subordination agreement or through clear priority rules.