When the owner of goods entrusts property to a person who sells the same type of goods and that person sells the property to an innocent third party, the owner cannot be estopped from recovering the goods from the third party.

Question

Quizplus · Accepted Answer

Under the principle of estoppel, if the owner entrusts goods to a merchant who deals in goods of that kind, and the merchant sells the goods to a bona fide purchaser without notice of the owner's rights, the original owner may be estopped from recovering the goods from the innocent third party. This principle is designed to protect the expectations of the third party who relies on the appearance of authority by the merchant to sell the goods.

When the Owner of Goods Entrusts Property to a Person