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Follow-up question for Could a contract with ludicrous terms be enforced?

At the end of the hypothetical there, they raise the possibility of someone secretly selling the same physical item (a unique car) to several different people. It seems to me that this must be against the law somehow, but I don't know exactly how it's handled. This possibility was not addressed in the discussion.

Concretely:

  1. I own a valuable physical object.
  2. I make a contract to sell this object to each of several different people, in exchange for money. To avoid detection, the deal is that they send me the money now, and then they pick up the item from an agreed-upon location on a specific date in the future.
  3. On the specified date, all of the buyers arrive at the specified location and discover that the object is present and nobody's stopping them from taking it ... except each other.
  4. I have pocketed the money and left town.

What is the name of the crime and/or tort I have committed? Who gets to keep the object? How have the courts handled this type of scam in the past? Is it handled differently if the "valuable physical object" is real estate? (It seems to me that this scam might be easier to execute with land, since nobody expects land to be delivered to them.)

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    I wonder if that situation is really any different to selling something you don't actually own for contracts 2 to n. I doubt that your scheme to have them all arrive at the same time and let them sort it out among themselves makes any practical difference - most reasonable buyers would not be arguing among each other, but go back and take the source (you) to court.
    – xLeitix
    Commented Nov 19, 2021 at 10:19
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    How is it not obvious that at the moment you sold it to the first person, you ceased to own it and thus could not sell it to even a second person, let alone more? Commented Nov 19, 2021 at 21:58
  • Good point, but how is it different if you have 2 of the physical item and you sold it to 15... or you had 49 of these and you sold it to 50... thinking a bit more, I have heard airline companies do this often, they oversell the seats assuming some passengers won't make it. I wonder how/what they are charged within such situations because its exactly the same from my point of view. Commented Nov 20, 2021 at 10:40
  • @RobbieGoodwin I have gone out of my way to make it as difficult as possible for anyone to know which of the contracts was executed first.
    – zwol
    Commented Nov 21, 2021 at 19:02
  • @zwol Simply, tell that to the Court! Broadly, what steps you took to hide your crime don't stop it being a crime and won't change the penalty. Why is that not obvious? Commented Nov 22, 2021 at 19:19

3 Answers 3

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What is the name of the crime and/or tort I have committed?

You are guilty of the crime of fraud, the crime of theft of the money and the item (I can't point you to the precise statute).

You have breached your contract of sale.

You are probably liable for fraud civilly (i.e. you could be sued for fraud).

But, if one was really creative, I imagine that one could find more grounds for civil and/or criminal liability, although they would probably be unnecessary since the victims have plenty of remedies to secure all possible relief already.

Who gets to keep the object?

Under the Uniform Commercial Code, Article 2, in the United States, the general rule is delivery of possession by the seller (which didn't really happen here to one distinct person), but for unique goods, title passes when the unique good is identified to a contract with a buyer, so first in time to contract, first in right to the car, would probably prevail.

But, I don't know what the rule would be in England and Wales.

Is it handled differently if the "valuable physical object" is real estate?

Land is harder to defraud someone with, because a reasonable person knows that in England and Wales real estate title is (usually, but not always) represented by a certificate of ownership maintained by a public official in the Land Registry, and is easily checked (about 15% of land in England and Wales show in the link is not registered so the possibility for deception is somewhat greater in that context).

Also, generally, you don't pay for real property until you simultaneously receive payment in good funds, while brief extensions of credit for a non-perfectly contemporaneous sale transaction are more common in cases involving tangible personal property.

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  • Comments are not for extended discussion; this conversation has been moved to chat.
    – Dale M
    Commented Nov 22, 2021 at 8:13
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What is the name of the crime?

Due to the dishonest behaviour of the "seller", and dependant on the available evidence, this would either be:

Fraud contrary to section 1 of the Fraud Act 2006 by breaching section 2:

(1) A person is in breach of this section if he—

(a) dishonestly makes a false representation, and

(b) intends, by making the representation—

  • (i) to make a gain for himself or another, or

  • (ii) to cause loss to another or to expose another to a risk of loss.

(2) A representation is false if—

 (a) it is untrue or misleading, and

(b) the person making it knows that it is, or might be, untrue or misleading.

...

Theft contrary to section 1 of the Theft Act 1968:

(1) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it...

How have the courts handled this type of scam in the past?

In my experience, by convicting the offenders for one or other of the above offences - and often followed up with a Confiscation Order under the Proceeds of Crime Act 2002

Is it handled differently if the "valuable physical object" is real estate?

Yes, as under section 4 of the 1968 Act:

(2) A person cannot steal land, or things forming part of land and severed from it by him or by his directions, except in the following cases, that is to say—

  • (a) when he is a trustee or personal representative, or is authorised by power of attorney, or as liquidator of a company, or otherwise, to sell or dispose of land belonging to another, and he appropriates the land or anything forming part of it by dealing with it in breach of the confidence reposed in him; or

  • (b) when he is not in possession of the land and appropriates anything forming part of the land by severing it or causing it to be severed, or after it has been severed; or

  • (c) when, being in possession of the land under a tenancy, he appropriates the whole or part of any fixture or structure let to be used with the land.

For purposes of this subsection “land” does not include incorporeal hereditaments; “tenancy” means a tenancy for years or any less period and includes an agreement for such a tenancy, but a person who after the end of a tenancy remains in possession as statutory tenant or otherwise is to be treated as having possession under the tenancy, and “let” shall be construed accordingly.

If these conditions are not met then the offence would still be fraud or theft (i.e. dishonesty to gain/lose or appropriate the buyers' money), along with the possibility of civil trespass to land. But as I have no experience of land-severence I cannot say how the courts might handle it.

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  • You are missing the question "Who gets to keep the object?" For a car, I think the first contract signed is valid and determines the new owner. Second and later contracts are fraudulent. For land I have no idea. Commented Nov 19, 2021 at 9:51
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In Germany, the civil side of the law is simple: If you think about it, only the legal owner1 or their legal representatives can actually transfer ownership.

This immediately, without any additional statute, declares all sales by a non-owner null and void because the seller tried or pretended to transfer a title they didn't have.

In your scenario, if we assume that the seller originally was the owner, the title would be validly transferred to the first buyer who actually completed the legal transaction. This doesn't have to be the first one who payed, picked up a car or moved into a house: Because in certain cases transfer of title is bound to an administrative procedure, e.g. an entry in the land register.

None of the subsequent buyers would acquire any title. If one of them took physical possession of the item they would have to return it to the first buyer who now owns the item, without any refund from the new owner. Of course they would have a claim against the alleged seller instead.

The criminal side in Germany depends on whether the void sales were intentional. Fraud ("Betrug") is defined in paragraph 263 StGB: Intentionally causing economic damage to somebody by deceiving them. The keyword here is "Absicht", intent. Your scenario suggests intent; but one can surely imagine scenarios where a person defensibly assumes to own something, only to learn after the fact that they actually did not. The same civil rule as above applies, of course — they never had any title, so they could not transfer it — but they didn't act criminally because they acted out of ignorance, not intent.


1 Owner in the sense of Eigentümer: The person whose property the item is, as opposed to the person who physically has it. The latter may have some rights as well, especially when leasing it, but selling the item is not among them ;-).

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