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JAMB Commerce 2012 Question 43

Question 43

Purchase and Sale of Goods

Yahaya bought a piece of furniture on a credit sale agreement from Ahmed and resold it to Ali before all installments were made. The court upheld that Ahmed could not recover possession of the items from Ali. The reason for the judgement was because

  1. A.ownership was transfered on completion of installment
  2. B.ownership was transferred on delivery
  3. C.Yahaya could not pass title to a third party
  4. D.Ali was still indebted to Yahaya.
Show the answer and explanation

Answer: B (ownership was transferred on delivery)

Explanation

Under a credit sale, ownership passes to the buyer on delivery, so Yahaya owned the furniture and could sell it to Ali.