Legal Definitions - ex defectu juris

Ex defectu juris is a Latin legal phrase, primarily used in Scots law, which translates to "from a defect in the right." This term describes a situation where a seller's legal entitlement or ownership of something they sold is found to be flawed or incomplete. Essentially, the seller did not possess a perfect legal right to the item or property they transferred. This original flaw in the seller's right can then cause significant problems for the purchaser, who might face challenges to their ownership, possession, or use of the purchased item.

Here are some examples illustrating this concept:

• Example 1: Real Estate Transaction

  Imagine a person sells a commercial building to a property development company. Several years later, it is discovered that the original seller only held a partial interest in the property, and a co-owner, whose rights were never properly extinguished, comes forward to claim their share. The development company, as the purchaser, now faces a legal challenge to its full ownership of the building.

  This illustrates "ex defectu juris" because the seller's "right" to convey full and unencumbered ownership of the entire building was defective from the outset. The purchaser's current legal predicament stems directly from this flaw in the seller's original entitlement.

• Example 2: Sale of Goods

  A collector purchases a rare vintage car from a reputable dealer. Months after the sale, law enforcement contacts the collector, informing them that the car was reported stolen decades ago and was never legally recovered by the dealer's previous owner. The true original owner successfully reclaims the vehicle from the collector.

  In this scenario, the car dealer's "right" to sell the vehicle was defective because it was stolen property, meaning the dealer did not have legitimate title to transfer. The collector's loss of the car is a direct consequence of this fundamental defect in the seller's right, demonstrating "ex defectu juris."

• Example 3: Business Acquisition

  A technology startup acquires a smaller software company, including all its intellectual property, such as a unique algorithm. After the acquisition, the acquiring company discovers that the original software company had developed the algorithm using proprietary code licensed from a third party, but the license agreement explicitly prohibited sub-licensing or transfer of the code without prior written consent, which was never obtained. The third party now demands that the acquiring company cease using the algorithm.

  Here, the selling software company's "right" to transfer full, unencumbered ownership of the algorithm as part of the acquisition was defective due to the restrictions in the original licensing agreement. The acquiring company's inability to fully utilize a key asset stems directly from this flaw in the seller's entitlement, which is an instance of "ex defectu juris."