Title to goods

Suppliers guarantee they have the right to sell the goods (clear title), unless the supplier alerted the consumer before the sale that they had ‘limited title’.

If goods are sold with limited title, any other person with ownership rights—for example, a person owed money by the previous owner—can ask a court for permission to take the goods back from the consumer.

This happens most often when goods are sold from deceased estates. While alive, the person may have pledged the goods as security. People owed money by the deceased sometimes try to repossess the goods after the items were sold as part of the deceased estate.

Undisturbed possession of goods

A supplier guarantees that no one will try to repossess or take back goods bought by a consumer, or prevent the consumer from using those goods, except when:

• the consumer has not met their obligations under the sale, hire or lease contract; 
• before the sale, the supplier told the consumer that another person had a security interest over the goods; 
• the consumer hired or leased the goods and the hire or lease period has ended; or
• at the time of buying the goods, the consumer was aware the supplier only had limited title.

No undisclosed securities on goods

A supplier guarantees that goods bought by a consumer are free of any hidden securities or charges and will remain so, unless the security or charge was either:

• placed on the goods with the consumer’s permission; or
• brought to their attention in writing before they bought the goods.

If a supplier makes it clear to the consumer there is limited title before sale, the supplier can claim to have disclosed all known securities or charges over the goods.

Example:

A financier claims to be owed money by the former owner of some goods, who may have used the goods as security for a loan. If the consumer did not know about the outstanding debt when buying the goods, the supplier who sold the consumer those goods would have to provide a remedy, for example, replacement goods.