A ''bona fide'' purchaser (BFP)referred to more completely as a ''bona fide'' purchaser for value without notice is a term used predominantly in
common law jurisdictions
Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...
in the
law
Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior, with its precise definition a matter of longstanding debate. It has been variously described as a science and as the ar ...
of
real property
In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, refers to parcels of land and any associated structures which are the property of a person. For a structure (also called an Land i ...
and
personal property
Personal property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law (legal system), civil law systems, personal property is often called movable property or movables—a ...
to refer to an innocent party who purchases property without notice of any other party's claim to the title of that property. A BFP must purchase for value, meaning that they must pay for the property rather than simply be the beneficiary of a gift. Even when a party fraudulently
conveys property to a BFP (for example, by selling to the BFP property that has already been conveyed to someone else), that BFP will, depending on the laws of the relevant
jurisdiction
Jurisdiction (from Latin 'law' and 'speech' or 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, the concept of jurisdiction applies at multiple level ...
, take good (valid)
title
A title is one or more words used before or after a person's name, in certain contexts. It may signify their generation, official position, military rank, professional or academic qualification, or nobility. In some languages, titles may be ins ...
to the property despite the competing claims of the other party. As such, an owner publicly recording their own interests (which in some types of property must be on a court-recognised Register) protects themselves from losing those to an indirect buyer, such as a qualifying buyer from a thief, who qualifies as a BFP. Moreover, so-called "race-notice" jurisdictions require the BFP to record (depending on the type of property by public notice or applying for registration) to enforce their rights. In any case, parties with a claim to ownership of the property will retain a cause of action (a right to sue) against the party who made the fraudulent conveyance.
England and Wales
In England and Wales and other jurisdictions following the 20th century oft-repeated
precedent
Precedent is a judicial decision that serves as an authority for courts when deciding subsequent identical or similar cases. Fundamental to common law legal systems, precedent operates under the principle of ''stare decisis'' ("to stand by thin ...
, the BFP will not be bound by equitable interests of which they do not have actual, constructive, or imputed notice, as long as they have made "such inspections as ought reasonably to have been made".
BFPs are also sometimes referred to as "
equity's darling". However, jurist
Hackney explains that the portrayal is inaccurate. In cases where legal title is passed to a ''bona fide'' purchaser for value without notice, equity does not show the purchaser any great affection in accepting the transfer. Rather, it recognises that it has no jurisdiction over the question of legal title, which belongs to the common law.
[ The relationship between the courts of equity and the BFP is at root characterised as, geared toward the BFP, with benign neglect of the old owner(s).]
United States
In the United States, the patent law
A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A ...
codifies the ''bona fide'' purchaser rule, . Unlike the common law
Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...
, the statute
A statute is a law or formal written enactment of a legislature. Statutes typically declare, command or prohibit something. Statutes are distinguished from court law and unwritten law (also known as common law) in that they are the expressed wil ...
cuts off both equitable ''and'' legal claims to the title.[''Filmtec Corp. v. Allied-Signal Inc.'', 939 F.2d 1568, 1573 (Fed. Cir. 1991)]
See also
* Market overt
* '' Nemo dat quod non habet''
* Title insurance in the United States
Footnotes
{{DEFAULTSORT:Bona Fide Purchaser
Property law
Property law legal terminology
Common law legal terminology
fr:Contrat de vente en France#Vente de la chose d.27autrui
sr:Nemo plus iuris