Where a manufacturer has registered a conditional sale agreement on the sale of the goods to a retailer, a member of the general public who is a customer of the retailer will, on purchase, receive good title to the goods despite the registration of the prior agreement. In addition, that customer need not perform any searches.

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Under a conditional sale agreement, the title to the goods passes to the retailer (and subsequently to the customer) upon fulfillment of the conditions of the sale, typically the full payment of the purchase price. The registration of the agreement primarily affects the rights between the manufacturer and retailer, not the rights of a bona fide purchaser for value without notice (i.e., the general public customer), who generally acquires good title to the goods without the need to perform searches.

Where a Manufacturer Has Registered a Conditional Sale Agreement on the Sale