4.

SALE UNDER A VOIDABLE CONTRACT

When the seller of goods has obtained possession thereof under a contract
voidable under section 19 and section 20 of the Contract Act, 1950 but the
contract has not been rescinded at the time of the sale, the buyer acquires a
good title to the goods, provided he buys them in good faith and without notice
of the sellers defect of title.

A voidable contract can be legally rejected by one party and is said to have a
defect. If the party with the power to reject the contract choose not to reject the
contract despite the defect, the contract becomes valid and enforceable.

It is usually only one of the two parties who would be adversely affected by
agreeing to a voidable contract if they had recognized the misrepresentation or
fraud made by the other party. For example, the first party would not have
agreed to the contract originally and has the opportunity to reject it after the
fact. In contrast, a void contract is contract is in herently unenforceable. An
example would be a contract that violates the law, such as a murder for hire
contract.

It is usually only one of the two parties who would be adversely affected by
agreeing to a voidable contract.
Example :
Mamat can have the title of the car if Jack had acquired the car from Paul under a
voidable contract (voidable as according to S19/20 Contract Act 1950. Example
Fraud, coercion, Undue influence Etc.) and at that time, Paul had not rescinded
the contract. Provided that Mamat bought it in good faith and had no notice
about the defect of Jacks title on the car. This will mean that the problem occurs
between Jack and Paul, and it is apparent but not realised. Thus, the point of
having Mamat not blamed and to earn the ownership.