Jun 26,2020 | 7 min read

Transfer of Ownership Law And Its Legal Definition By Rahul Hingmire

Transfer of Ownership Law And Its Legal Definition By Rahul Hingmire


Ownership involves the absolute rights and legitimate claim to an object. Transfer of ownership is the means by which the ownership of a property is transferred from one hand to another. This includes the purchase of a property, assumption of mortgage debt, exchange of possession of a property or any other land trust device. 

Essentials of Ownership

Upon analyzing the various definitions of ownership, the following essentials of ownership can be derived:

  1. Indefinite user: The owner of a property has the liberty to make use of his property in whatever manner he pleases within the bounds of the law. There is a corresponding duty on others not to interfere with this right

  2. Unrestricted Right of Disposition: The owner of a property may dispose of the property at his will. The only requirement is that he has good title to the property that he seeks to transfer.

  3. Right to Possess: Ownership is a bundle of rights that includes the right to possess the thing that he owns.

  4. Right to Exhaust: If the subject matter of ownership is of such a nature that it can be exhausted, the owner has the right to exhaust it as he pleases.

  5. Residuary Character: The owner may selectively part with certain rights that form a part of this bundle of rights such as the right to occupation for a period of time, etc., however, that does not result in abrogation of his ownership.

  6. Right to Destroy or Alienate: The owner of a property may destroy or alienate the property over which he has ownership rights.

Transfer of Ownership law and its Legal Definition

Transfer of Property in Goods

The property in the goods is said to be transferred from the seller to the buyer when the latter acquires the proprietary rights over the goods and the obligations linked thereto. 'Property in Goods' which means the ownership of goods, is different from ' possession of goods' which means the physical custody or control of the goods.

The transfer of property in the goods from the seller to the buyer is the essence of a contract of sale. Therefore the moment when the property in goods passes from the seller to the buyer is significant for the following reasons:

  1. Ownership -- The moment the property in goods passes, the seller ceases to be their owner and the buyer acquires the ownership. The buyer can exercise proprietary rights over the goods. For example, the buyer may sue the seller for non-delivery of the goods or when the seller has resold the goods, etc. 

  2. Risk follows ownership -- The general rule is that the risk follows the ownership, irrespective of whether the delivery has been made or not. If the goods are damaged or destroyed, the loss shall be borne by the person who was the owner of the goods at the time of damage or destruction. Thus the risk of loss prima facie is in the person in whom the property is. 

  3. Action Against Third parties -- When the goods are in any way damaged or destroyed by the action of third parties, it is only the owner of the goods who can take action against them. 

  4. Suit for Price - The seller can sue the buyer for the price unless otherwise agreed, only after the gods have become the property of the buyer. 

  5. Insolvency - In the event of insolvency of either the seller or the buyer, the question whether the goods can be taken over by the Official Receiver or Assignee, will depend on whether the property in goods is with the party who has become insolvent. 

Essentials for Transfer of Property -- The two essentials requirements for the transfer of property in the goods are:

  1. Goods must be ascertained: Unless the goods are ascertained, they (or the property therein) cannot pass from the seller to the buyer. Thus, where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained 

  2. Intention to pass Property in Goods must be there: In a sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.

A Latin maxim says: ‘The Nemo dat quod non-habet.’ That is the basic principle of the transfer of title. Section 27 to 30 of the Sale of Goods Act, 1930 states laws on the transfer of title. The Latin maxim says that no one can give what they don’t have. Therefore, the property can be transferred on by whoever has good title to the property. In such cases, the buyer does not acquire a better title to the goods than the seller had, provided that the conduct of the owner precludes the authority of the seller to sell. There are exceptions to this rule as well. The difference between ownership and possession is also of significance. Ownership indicates having the title in the property which results in absolute rights and control while possession refers to mere physical control over the property. Transfer of possession in property does not always result in the transfer of ownership and title.



  1. Transfer of Ownership Law and Legal Definition. (N.d.). Retrieved from https://definitions.uslegal.com/t/transfer-of-ownership/

  2. Transfer of Property In Good. (N.d.). Retrieved From https://www.advocatekhoj.com/library/lawareas/saleofgoods/transfer.php?Title=Sale%20of%20Goods&STitle=Transfer%20of%20Pro

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Rahul Hingmire

I have been practising in Mumbai for more than 10 years. I am engaged as legal advisor and representative for civil & commercial litigation, domestic & international arbitration, real estate transactions & disputes. Since, inception of Insolvency & Bankruptcy Code cases, I have been handling various assignments Pan India basis. Since 2018, I am also supervising team of Advocates operating from Mumbai, New Delhi & Pune.