barjohn
Member
Restrictions on deeds on property have been around forever. You can't sell a property in violation of those restrictions so if you don't have a right to sell the buyer has no rights if he purchases in violation of those restrictions.
This appears to me to be modeled after real property law. For example, a buyer purchased a home with an HOA that restricts buyers from renting the home. He sells the home to an investor that wants to rent the home. Can the investor be restricted from renting the home? Absolutely! Suppose the investor says he didn't know about the restriction? He is still bound. He should have done his due diligence. Would a buyer buying a Tesla from an employee be expected to know that Tesla may have placed restrictions on the sale of a vehicle that is not yet available to the general public? Probably. I wouldn't want to foot the legal bill that would be required to test it.
Another example is a seller selling a stolen car. The seller has no right to sell. A buyer has no right to buy stolen property as his rights are derived from the seller's rights. In such a case the seller had no right to sell so the buyer had no right to buy. The original owner is entitled to have his item returned to him. The buyer can sue the seller to try and recover his loss but in most cases it isn't worth the effort or cost as the seller has nothing of value to reimburse the buyer with.
Before you paid someone over twice what you know an item is worth, wouldn't you want to be sure the seller was legitimate and that there were no restrictions on that sale? I certainly would. The old adage buyer beware certainly applies here!
This appears to me to be modeled after real property law. For example, a buyer purchased a home with an HOA that restricts buyers from renting the home. He sells the home to an investor that wants to rent the home. Can the investor be restricted from renting the home? Absolutely! Suppose the investor says he didn't know about the restriction? He is still bound. He should have done his due diligence. Would a buyer buying a Tesla from an employee be expected to know that Tesla may have placed restrictions on the sale of a vehicle that is not yet available to the general public? Probably. I wouldn't want to foot the legal bill that would be required to test it.
Another example is a seller selling a stolen car. The seller has no right to sell. A buyer has no right to buy stolen property as his rights are derived from the seller's rights. In such a case the seller had no right to sell so the buyer had no right to buy. The original owner is entitled to have his item returned to him. The buyer can sue the seller to try and recover his loss but in most cases it isn't worth the effort or cost as the seller has nothing of value to reimburse the buyer with.
Before you paid someone over twice what you know an item is worth, wouldn't you want to be sure the seller was legitimate and that there were no restrictions on that sale? I certainly would. The old adage buyer beware certainly applies here!