Deck 2- Transfer Flashcards
What are the three steps of the transfer process and at what stage does ownership pass
Contract, conveyance and external act
Ownership passes once all three are fulfilled
When will a title be void
When the transferors title was void (nemo data quod non habet)
When the contract or conveyance is fatally flawed- no capacity, no consensus, non-compliance with formalities
When will a title be voidable
When it’s based on defective consent
- Undue influence
Requires Relationship of trust, abuse of that trust and a benefit to the dominant party - Facility & circumvention
Requires facility, circumvention (deceit) and loss to the deceived party - Offside goals rule
If second grantee knows if first, ((Rodger builders v fawdry or Gibson v rbs) then it’s their obligation to check first granted doesn’t have a valid title
What are the remedies for a void or voidable title
Void- restitution
Voidable- deed can be reduced and property restored to granter
What are the essentials required for voluntary transfer
Capacity and consent
Agreement about parties, property and price
What is the publicity principle
Mutual consent is not sufficient for transfer (except under SOGA 1979)
An external act is also necessary. For land this is a registered deed and for corporeal moveables it’s usually delivery.
The reason for this is that acts that could affect third parties should be made public so that the third parties are aware of them.
At what point does transfer take place
Once all three steps have been completed (contract, conveyance, external act) transfer is instantaneous. At that moment the ownership of the property switches- Scots property is unititular (Sharp v Thompson)
Sharp v Thompson
Construction company which sold the Thompsons the home went into receivership before the disposition was registered. The Bank of Scotland acquired a real right (security) before the Thompson she could take ownership so the thomsons ownership was subject to that real right. House of Lords seemed to suggest that at one point there was a sort of ownership held by the seller and another buyer at the same time which is contrary to the unititular nature of scots law. Nevertheless, Burnetts Tr v Grainger held that Sharp v Thompson lacked a clear ratio and should be construed as relevant only to the very narrow area of floating charges. The unititularity of property law was therefore confirmed.
Who carries the risk where payment and title do not coincide
The buyer who pays before acquiring title runs the risk of the sellers insolvency (Sharp v Thompson and Burnetts Tr v Grainger)
If ownership passes before payment, the seller assumes the risk.
What’s a warrandice
It’s a warranty or guarantee
S12 of the SOGA 1979 implies a warranty as does common lawwiyj property law usually the main concern is a guarantee of good title
If a contract is void does that mean a title is also void
No the validity of a property right is not dependent on the validity of a contract on which the title is based
What remedies are there if a title is voidable
You can simply demand that ownership is retransferred to you (Short’s tr v Chung)
*note that w corporeal moveables ownership can’t pass without delivery unless there’s a sale)
If there’s a deed of transfer (won’t be with sale of goods) you can move to have it reduced
Two types of reduction
1) Catholic reduction- title is avoided. If X was owner and there’s a transfer to Y and Ys title is avoided, X becomes owner again
2) reduction ad hunc effectum where title is avoided only in relation to the person who has avoided it but remains valid in relation to everyone else. This means if it’s one of the parties who avoids it it’s effect is Catholic but if it’s by a third party it’s effect is ad hunc effectum (Professor Gretton)
When the granters title is good what happens
If the grabters title is absolutely good then the grantees right will likewise be absolutely good except in certain circumstances, mainly where there is an existing third party right i.e. An inhibition or where the offside goals rule applies
When the granters title is voidable what happens
- If a voidable title is avoided it becomes void *
1) if the grantee knew the granters title was voidable, the grantees title is also voidable
2) if the grant is gratuitous the grantees title will be voidable, whether or not they knew that the granters title was voidable.
3) otherwise the grantee will acquire good title. See SOGA 1979 s23, “the buyer acquires a good title to the goods provided he buys them in good fats and without notice of the sellers defect of title”
Distinguish Morrison v Robertson and MacLeod v Kerr
Morrison v Kerr- as identity went to the essence of the contract, it’s effect was to void the transfer. Therefore title could not pass on as it was void.
MacLeod v Robertson- identity didn’t go to the root of the contract so the effect of fraud was not to leave the title void, although it was voidable. As it was a non-gratuitious sale and the buyer was not aware of the title being voidable, the buyer acquired good title.
