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I got into a discussion about finder's law yesterday. I live in Canada, so that's the law we were looking at, but I'd be interested in law from any jurisdiction. Most of our discussion was based on this page: What is Finders Law?, and this one: All is not lost: the law of lost and found.

During our discussion, someone proposed this hypothetical:

  1. Alice loses something of value, let's say a necklace.
  2. Bob finds the necklace. He puts up FOUND posters, makes phone calls, and generally does his due diligence in searching for the original owner.
  3. After a week, Bob is convinced that the original owner isn't showing up, and with no desire to keep the necklace for himself, sells it to Charlie for a fair price.
  4. After Charlie buys the necklace from Bob, Alice shows up, sees the necklace, and asks for it back. Let's assume that she has proof that it was originally hers.
  5. Does she get it back? Who pays?

Under the law as we understand it, Alice, as the original owner, has the superior claim to the necklace no matter what. However, Charlie paid for the thing, and he's not the finder. Bob can't give it back, because he doesn't have it anymore. What is the legal situation here?

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Alice owns the necklace

If this goes to court there are a couple of ways this could turn out. If this is settled by negotiation or ADR there are even more. For example, Alice may have always had a secret crush on Bob and may be satisfied if Bob goes on a date with her - this is a fine and dandy settlement, it’s just not one available to a court.

A court will resolve the matter in one of these ways assuming the facts are proven:

  1. Bob pays damages to Alice for the conversion - probably the fair market value. Charlie keeps the necklace.

  2. Alice gets the necklace back. Charlie can either:

    1. Treat the contract with Bob as void due to complete failure of consideration and get his money back.
    2. Affirm the contract and seek damages - again, probably the fair market value but if Charlie can prove that there was a specific buyer willing to pay $X, then $X.

The court will look for the most just outcome in the circumstances. It’s just that Bob pays because he is the lawbreaker. Option 1 is most just because it interferes least with the innocent Charlie’s rights. If the necklace is just a necklace. However, if the necklace has more than monetary value to Alice (e.g. it’s the necklace her mother gave her on her 16th birthday just before her mother died in tragic circumstances) then Option 2 might be more just.

  • What happens if Bob agrees to date Alice in return for her forgetting the necklace but she gets disappointed and claims 1 or 2 through the court anyway? Won't the date legally settle the claim? – Greendrake Apr 19 '20 at 4:25
  • @Greendrake if Bob has complied with the terms of the settlement (which may be a contract or even a ruling if done through Arbitration) then Alice’s claim will be dismissed. – Dale M Apr 19 '20 at 5:28
  • BtW a settlement involving a “successful” date would likely be void for uncertainty. Bob would be wise to be very specific about the terms. – Dale M Apr 19 '20 at 5:29
  • Follow-on question: Did Bob have the right to sell the necklace? If I find something, am I ever allowed to sell it? Must I disclose to the buyer that it is a found object? – Leif Fitzsimmons Frey Apr 21 '20 at 2:50
  • @LeifFitzsimmonsFrey good follow up question. Ask it. – Dale M Apr 21 '20 at 4:00

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