The general rule is that a seller cannot make a buyer the owner of something that the seller does not own. This is represented by the Latin principle nemo dat quod non habet, which means that no-one can give what they do not have.
However, this general principle is not commercially convenient. For example, a retailer may wish to advertise for sale items which they do not hold in stock but will obtain as required to meet orders placed by customers.
The sale of goods legislation contains rules devised to reconcile these difficulties. These rules do not require a seller to be the owner of goods they contract to sell unless the circumstances of the contract show a different intention. However, a seller is bound by an implied condition that they have or will have a right to sell the goods at the time when ownership is to pass to the buyer; and an implied warranty that the buyer shall have and enjoy quiet possession of the goods.
In effect, these rules mean that, if a seller fails to make the buyer the owner of the goods, and protect the buyer's quiet possession of those goods, the seller is liable under the contract.
The legislation also provides an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made.