Bona Fide Purchaser Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Bona Fide Purchaser, written in plain English, along with examples of how it is used.
What is Bona Fide Purchaser?
(n) A Bona Fide Purchaser is the person who has purchased a property , article or goods in the normal course of business in good faith without the apparent knowledge of the fraud involved in that transaction. A bona fide purchaser is not responsible for the damages to the original owner of the goods or property he purchased.
History and Meaning of Bona Fide Purchaser
Bona Fide Purchaser is a legal term that traces its origins to the common law system of England. The concept was developed to protect buyers who had acted in good faith and without any knowledge of fraud. The term "bona fide" is Latin for "in good faith," and a Bona Fide Purchaser is someone who has made a purchase in good faith without any knowledge of any wrongdoing.
The legal system sees the protections provided to a Bona Fide Purchaser as necessary to ensure that commerce can thrive through the sale and purchase of goods, even when there is a risk of fraud. It provides a safety net for those who have entered into contracts believing that they are doing so honestly and with no ill intentions.
Examples of Bona Fide Purchaser
A person purchases a used car from a dealership, unaware that the car was stolen from its original owner. The person is a Bona Fide Purchaser and is not responsible for returning the car to the original owner.
A company purchases a valuable piece of artwork from a reputable auction house, unaware that the artwork was stolen from a museum years earlier. The company is a Bona Fide Purchaser and does not have to give up the artwork to the museum.
A homeowner purchases a property from an estate agent, unaware that the seller is not the legal owner of the property. The homeowner is a Bona Fide Purchaser and is not responsible for any claims made by the actual legal owner of the property.
Legal Terms Similar to Bona Fide Purchaser
Caveat Emptor – Latin for "let the buyer beware," this legal principle states that buyers are responsible for their purchases and must do their own due diligence before buying.
Fraud – A false representation of facts by one party to another, with the intention of inducing the other party to act, resulting in damages.
Warranty – A guarantee given by a seller to a buyer that a product or service will meet certain specifications or standards.