Question

Steve brings his watch to Knell Watches to be repaired. Knell Watches sells and repairs watches. Steve entrusts his watch at Knells' until it is repaired. The watch store repairs the watch, but then sells it to Kevin, who buys the watch with a fraudulent check that bounced. Kevin then resells the watch to his friend Jonathan, who is unaware of the stolen nature of the watch. According to the entrustment rule, what legal recourse does Steve have to reclaim the watch or collect damages?

Answer 1

Answer:

Steve has no legal recourse against Jonathan but he can try to take action against Knell Watches.

Explanation:

The entrustment rule says that entrusting goods to a seller who deals in goods of that kind, gives that seller the power to transfer those goods and all rights to a buyer in the ordinary course of business. Entrusting includes giving your goods to the seller and leaving goods that have already been bought with the seller, with the intention of picking the goods up or having them delivered at a later stage.

Here Steve cannot claim back his watch from Jonathan because he gave the watch to Knell Watches willingly. Jonathan also bought the watch from Kevin in good faith, he had no idea that the watch had been stolen from Knell. Kevin sold the watch to him in good faith and he had no reason to doubt that the watch really belonged to Kevin because they are friends. if, however, someone else had taken the watch in to Knell Watches on behalf of Steve, then he would be able to get the watch back from Jonathan but he can't now because he took the watch in himself. Knell was also deceived by Kevin and so Jonathan is protected because of that according to Uniform Commercial Code.