Bona fide purchaser CASES
In English law, a bona fide purchaser (or “good faith purchaser”) is someone who acquires property or assets in good faith, without knowledge of any defects in title or prior claims by third parties.
Definition and Principles
A bona fide purchaser must purchase for value and without notice of any competing interests or defects. They may receive protection against prior equitable claims, providing them a secure legal title.
Common Examples
- A purchaser who buys stolen property innocently, without knowledge of theft.
- A person buying land without notice of an unregistered equitable interest.
- Buyers acquiring assets unaware of previous fraudulent transactions.
Legal Implications
- Bona fide purchasers may gain priority over earlier equitable claims.
- Protects market confidence by upholding transactions made in good faith.
Practical Importance
Understanding the bona fide purchaser rule clarifies transactional risks, reinforces the importance of due diligence, and ensures clarity and fairness in property and commercial dealings.
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Plaintiffs sold a car to a rogue impersonating another person, accepting his cheque only after verifying the identity in a directory. The rogue sold the car to an innocent defendant. The court held the contract was void due to mistake of identity. Facts The plaintiffs, three elderly ladies, advertised their car for sale. A rogue, introducing himself as ‘Hutchinson’, offered to buy it for £717. When he produced a chequebook, one of the plaintiffs stated they would not accept a cheque and the deal was off. To persuade them, the rogue gave his full name as P.G.M. Hutchinson and an
