Business Law Report: Canadian Property Law and Yacht Sale Disputes

This report analyzes a business law case involving the sale of a yacht, focusing on property rights, chattel mortgages, and conditional sale agreements under Canadian law. The central issue revolves around the obligations of the seller, Amelia, who sold a yacht subject to an unregistered chattel mortgage. The report examines the rights and liabilities of all parties involved, including the initial buyer, Donald, a dealer, and a subsequent buyer, Wray. It explores the application of the Canadian Property Law, the Sale of Goods Act, and the Property Law Act 1996, specifically addressing issues like stoppage in transit, the implications of conditional sale agreements, and the consequences of failing to disclose mortgage information. The report concludes that compensation can be claimed by the affected parties against the sellers who failed to meet their obligations, and highlights the importance of good faith and full disclosure in property transactions.

Running head: BUSINESS LAW
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Considering the case study, it has been observed that the main problem is evolved with
the selling terms and condition of Yacht. In this report, an observation has been made regarding
selling capacity of any property. Further, the rights and liabilities of all the parties have been
discussed here. The scope of chattel mortgage agreement and conditional sale agreement has also
been discussed in this case. Special focus has been given on the obligation of the seller in case of
a property and character of property has been discussed categorically.
There is certain problem statements found in the case. It has been observed in the case
that rights of every party should be discussed to identify the issues of the case. The first issue in
this case is to determine whether Amelia has any right to make sale contract with other while the
selling object is subjected to an unregistered chattel mortgage agreement. The second issue
regarding the case is to identify the rights of the dealer to seize the yacht from the possession of
Wray. Further, the right of Wray in this case should be considered.
According to Canadian Property Law, the term property can be divided into two parts
such as real property and personal property. Any kinds of chattel or goods come under the
definition of personal property. It has been stated under the Property Law Canada that right of
the buyer depends on the nature of the goods and the process by which the goods have been
acquired (Bridge 2015). In this case, it has been observed that Amelia was the owner of a yacht
and the Yacht was subjected to one unregistered chattel mortgage. When a lien has been taken on
the personal property, the same has been called as chattel mortgage. It binds the parties in order
to make any sale regarding the mortgage object (Bently and Sherman 2014). Further, certain
obligations have been imposed on the seller under the Property Law of Canada. The sellers are
obliged to transfer good title of the goods to the buyer. It is his duty to make the assurance that

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the selling goods are free from all the encumbrances and quality of the goods should be
measured accordingly.
In this case, it has been observed that Amelia has failed to perform all the obligations and
she had sold the yacht to Donald without revealing the fact that the yacht is under mortgage
agreement. However, she should mention the fact to him. In case of any future problem, Donald
can claim compensation from her. Under the Canadian Sale of Goods Act, any party has the right
to recover the goods by the principle of stoppage in transit (Dickens 2017). However, it is a legal
right of the seller so that they can stop the transfer of goods and resume the possession of him
upon the goods (Bhandar 2015).
It has further been observed that Donald transferred his right over the yacht to a dealer
and take a bigger yacht. It has been observed that Amelia had concealed the mortgage fact from
Donald and he had no knowledge on it. Further, he had purchased the yacht in good faith and in
legal way. Therefore, he has every right to sell the yacht to anyone. It has further been observed
that the dealer had not found any claim over the yacht and made a conditional sale agreement
with Martin. According to Property Law Act 1996, the term conditional sale agreement
comprised of certain conditions (Murrell and Păun 2017). According to the Act, the rights and
possession of the seller remained on the goods until the buyer has made the full payment
regarding the same. Therefore, the parties of the conditional sale agreement are under the
obligation to make full payment in order to get full possession over the property. Further, in case
the buyer has paid the full amount to the seller, seller has the right to recover the possession over
the transferred goods. In this case, it has been observed that Martin has made a conditional sale
agreement with the dealer and he has failed to make the full payment (Spiro 2015). However,
during the period, he sold the yacht to Wray. It has been learnt from the case that Wray has failed

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to make any search for claim. According to the rules of conditional sale agreement, the dealer
has all the rights to take back the possession over the property that is the yacht. Therefore, it is
justified that he had seized the yacht from the possession of Wray. However, Wray can claim
compensation from Martin as he had failed to perform his duties and obligations according to the
Property Law Act of Canada.
The probable outcome regarding the same can be affective for them whose legal rights
have been vitiated by the sellers. Considering the case, it has been observed that not all the
sellers have performed their obligations in good faith and they have failed to meet all the
obligations mentioned under the Property Act (Cuming 2015). Therefore, it can be stated that
two parties can claim for compensation from their respective seller, as the sellers have failed to
perform their obligations accordingly. First compensation should be obtained from Amelia, as
she has failed to perform her duties as seller and did not disclose all the facts regarding the sale
object. Further, the dealer can recover the possession over the yacht according to the legal
provisions of conditional sale agreement. Therefore, in that case, Wray has all the rights to make
a claim from Martin as he has failed to disclose the matter of conditional sale agreement.
Further, it can be stared that the affected parties have the right to file case against the
disputed sale agreement and against the sellers. The probable outcome of the case can be that
Donald and Wray can file case before the competent authorities and can claim compensation
from the respective sellers.

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Reference:
Bently, L. and Sherman, B., 2014. Intellectual property law. Oxford University Press, USA.
Bhandar, B., 2015. Critical legal studies and the politics of property. In Researching Property
Law (pp. 60-75). Palgrave MacMillan London.
Bridge, M., 2015. Personal property law. OUP Oxford.
Cuming, R.C., 2015. Priority Competition Between Secured and Unsecured Creditors: The
Evolution of Policy. Banking & Finance Law Review, 30(3), p.457.
Dickens, B.M., 2017. Living tissue and organ donors and property law: more on Moore.
In Organ and Tissue Transplantation (pp. 37-57). Routledge.
Murrell, P. and Păun, R.A., 2017. Caveat Venditor: The Conditional Effect of Relationship-
Specific Investment on Contractual Behavior. Journal of Law, Economics & Organization, 33(1).
Spiro, P., 2015. Prepayment Penalties in Canadian Mortgage Law.

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