Sale of Another Person’s Property in Commercial Transactions

Sale of Another Person’s Property in Commercial Transactions

In commercial practice, parties routinely engage in a wide range of transactions that may give rise to serious legal complications when the applicable legal framework is not properly understood. One recurring issue is the sale of another person’s property, a situation in which an individual transfers property that they do not own to a buyer. In such cases, the seller, without legal authority or the consent of the true owner, purports to sell property belonging to someone else. This conduct conflicts with fundamental principles of property rights.

Under Iranian law, the sale or transfer of another person’s property is treated as a criminal offense and may expose the perpetrator to significant consequences. The issue is particularly important in commercial contexts, where transactions are often conducted through agency, representation, delegation, or a power of attorney. If a person falsely presents themselves as the owner, or otherwise acts without the owner’s authorization, and sells the property, the conduct may qualify as a clear example of selling another person’s property. Accordingly, familiarity with the governing legal framework, the conditions required for criminal liability, applicable penalties, and the role of intent is essential for all commercial actors. In adjudicating these cases, courts generally examine not only the criminal character of the conduct but also the underlying legal relationship between the parties to the transaction.

Legal Basis of the Offense Under Iranian Law

In the legal system of the Islamic Republic of Iran, selling another person’s property is regarded as a serious violation of private property rights, a principle emphasized first in the Constitution and then in criminal legislation. Article 47 of the Constitution expressly states that legitimate private property is to be respected, meaning that no one is entitled to interfere with another person’s assets.

The primary statutory basis in this area is Article 1 of the Law on the Transfer of Another Person’s Property, enacted in 1929 (1308). Under this provision, a person who transfers another person’s property, whether as the object itself or as a benefit, while knowing that it belongs to someone else and without legal authorization, is considered a fraudster and is punishable under the aggravated punishment framework applicable to fraud and related offenses. As a result, the legal element of the offense is relatively clear. Any sale or transfer of property belonging to another, where the perpetrator has knowledge of the true ownership, may give rise to criminal liability.

It should also be noted that, depending on the facts, the conduct may overlap with other offenses such as breach of trust, forgery, or use of forged documents. This is why courts often carefully examine the facts to determine the most accurate legal characterization and the applicable charges. Understanding the legal foundations is therefore the first step toward a correct analysis of this offense in commercial contexts.

Conditions Required for Establishing the Offense

To classify conduct as the sale of another person’s property, several elements must generally be present.

First, the property must in fact belong to someone other than the seller under the law. Second, the seller must have knowledge that the property is not theirs. If the seller genuinely lacked awareness and acted in good faith, the conduct may not satisfy the criminal standard, although civil consequences may still arise. Third, the transfer must occur without legal authorization. Where a person sells property pursuant to a valid power of attorney or an official agency relationship granted by the owner, the act is not ordinarily treated as criminal. In the absence of such authority, the transaction lacks legitimacy.

Fourth, criminal intent must be established. The court must be satisfied that the seller acted with an intent to deceive or to cause harm. The mental element is particularly significant because many disputes arise from legal errors, misunderstandings, or complex contractual arrangements in which bad faith may not exist. Finally, the existence of loss, or the likelihood of loss, to the buyer or the true owner is often relevant to assessing the overall structure of the offense. When these elements are established together, the conduct may constitute a criminal act and result in penal sanctions.

Distinguishing the Sale of Another Person’s Property From Fraud and Breach of Trust

A key analytical issue is distinguishing this offense from fraud and breach of trust. These offenses may appear similar, but they rest on different foundations.

In the sale of another person’s property, the central issue is the unlawful transfer of property that belongs to someone else. In fraud, the focus is on the use of deceptive means to mislead the victim and unlawfully obtain property or benefit. In other words, deception is the defining feature of fraud, while lack of ownership and unauthorized transfer are central to the sale of another person’s property.

Breach of trust arises where property has been entrusted to the offender in an official or fiduciary capacity, and the offender then acts against that trust by misusing or misappropriating it. If the offender was never entrusted with the property and instead simply transferred it unlawfully, the legal characterization may not fit breach of trust. In practice, courts determine the correct classification based on the specific facts of each case. Where elements overlap, careful legal assessment is required to identify the appropriate charge and the boundaries between these offenses. This distinction is particularly important in commercial disputes because it can affect jurisdiction, evidentiary burdens, and sentencing outcomes.

The Role of Criminal Intent and Bad Faith

Criminal intent, meaning awareness and deliberate wrongdoing, is a fundamental element. Without proof of intent, a conviction for this offense is generally not possible. The offender must know that the property does not belong to them and must nevertheless proceed with the transfer. If a person mistakenly believes they own the property or acts based on incomplete information, the conduct may be treated as a civil wrong rather than a criminal act.

Because intent is central, courts often require a detailed examination of documents, correspondence, the parties’ interactions, and witness testimony. In many cases, the entire judicial assessment begins with the evaluation of the mental element. Bad faith may be directed toward both the owner and the buyer, meaning the offender intends to harm the true owner while also deceiving the buyer. In some cases, the seller may attempt to create an appearance of legitimacy by using formal or informal contracts to conceal the true status of ownership. Such conduct may strongly indicate intent. Accordingly, establishing intent, together with the physical elements of the transfer, is essential. Where intent cannot be proven, criminal classification may fail, even if civil liability remains.

Civil and Criminal Consequences

The sale of another person’s property has serious consequences not only under criminal law but also under civil liability principles. A person who commits this act may be accountable under criminal law and may also be required to compensate both the true owner and the buyer.

From a civil perspective, the buyer may have paid substantial funds in reliance on the seller’s representations and may later discover that the property must be returned to the true owner. In that situation, the buyer may seek restitution of the price paid and compensation for related losses, including transaction costs and other foreseeable damages. The true owner may also pursue recovery of the property and compensation for losses caused by unlawful transfer or interference.

From a criminal perspective, the offender may face penalties such as imprisonment, monetary fines, and, in certain cases, restitution of the property to the rightful owner. Where the conduct is accompanied by additional offenses, such as forgery or use of forged documents, penalties may be more severe and may be combined depending on the legal characterization. In some cases, supplementary sanctions may also be imposed, including restrictions on commercial activity or holding representative roles. As a result, the consequences are multidimensional and may affect the offender financially, legally, and reputationally, especially where intent is clear or the misconduct is repeated.

Legal Effects in Commercial Transactions

In commercial relationships, the sale of another person’s property can create extensive legal complications. The buyer may face immediate uncertainty, particularly where the true owner seeks recovery. If the property can be reclaimed, the buyer may lose possession and be forced to pursue the seller for recovery of the purchase price, often through lengthy proceedings. The true owner may file claims to recover the property, and courts may order the return of the asset, thereby rendering the transaction between the seller and the buyer ineffective in practice.

In civil proceedings, the buyer may seek damages against the seller, including repayment of the price and compensation for losses caused by delay, inability to use the property, storage costs, disruption of business operations, and other commercial impacts. Where the transaction involves specialized goods, raw materials, or industrial products, additional losses may arise from halted production or missed market opportunities. Courts may, depending on proof, recognize not only reimbursement of the transaction amount but also further damages for loss of use, loss of opportunity, and related commercial harm.

In criminal proceedings, the seller may be prosecuted, and penalties may be aggravated where the conduct is linked to forged documentation or other criminal acts. In appropriate cases, courts may also impose supplementary measures, including prohibitions on certain commercial activities. Overall, this conduct may result in significant legal, financial, and reputational exposure.

Competent Forums and Jurisdiction

Different judicial authorities may be involved depending on whether the matter is pursued primarily as a civil dispute, a criminal prosecution, or both. If the objective is invalidation of the transaction, recovery of property, or compensation, a civil claim is typically filed before the competent civil court. If criminal intent and wrongdoing are alleged, the matter may proceed through criminal channels beginning with the prosecutor’s office, and the case will be handled under the applicable criminal procedure rules.

In more complex matters involving forged documents or broader commercial impact, jurisdiction may shift to specialized forums depending on the facts and the presence of third-party rights or public order considerations. Where the conduct occurs within international commercial transactions or within regulated markets, additional complaint mechanisms may exist through relevant regulatory bodies, chambers of commerce, or arbitration frameworks. In some settings, these bodies may facilitate quicker protective measures, such as interim relief designed to secure the rights of the buyer or the true owner.

Preventive Measures in Commercial Practice

Preventing the sale of another person’s property requires reliable preventive practices and legal controls. A primary step is verifying ownership before entering into any transaction. Obtaining proof of title, conducting official registry searches where available, reviewing formal documentation, and confirming the validity of any power of attorney can significantly reduce risk. In cross-border transactions, additional safeguards, such as bank guarantees, identity verification mechanisms, and due diligence on the counterparty’s record, are highly relevant.

Contracts should include clear legal protections, including representations and warranties of ownership, termination rights, payment safeguards, performance guarantees, and dispute resolution clauses. Internal compliance processes, staff training, standardized pre-contract review procedures, and consultation with legal counsel can materially reduce exposure. Where appropriate, insurance products or bank guarantees may also be used to mitigate potential loss.

Compensation Pathways for the Buyer and the True Owner

If the sale of another person’s property occurs, both the buyer and the true owner may rely on legal mechanisms to seek relief. The true owner may pursue recovery of the asset in court and assert ownership rights directly against the seller and, in certain circumstances, the buyer. The buyer may claim repayment of the purchase price and compensation for costs incurred in connection with the transaction. If the agreement contains a penalty clause or ownership guarantees, those provisions may support recovery, including through contractual security or collateral where available.

In addition to financial loss, the buyer may seek compensation for non-financial harm, including reputational damage, as well as commercial losses arising from missed opportunities. Where the unlawful sale causes business interruption or loss of a commercial opportunity, courts may consider claims for lost profit, replacement costs, and related losses, subject to the applicable standards of proof.

The Role of Legal Counsel

Legal counsel plays a decisive role in matters involving the sale of another person’s property, particularly because these cases often include both civil and criminal dimensions. A qualified lawyer can assist from the earliest stage, including ownership verification, the preparation of civil petitions and criminal complaints, the determination of the competent forum, the seeking of interim measures, and the presentation of evidence.

Counsel can also coordinate with official experts to assess title, quantify damages, and analyze commercial impacts. In high-value transactions or matters connected to regulated markets, legal representation helps ensure that procedural deadlines are met, that defenses are properly structured, and that protective measures, such as injunctions or asset freezes, are pursued where available and justified.

Conclusion

The sale of another person’s property is a complex and significant issue in commercial relations and requires careful legal handling. Understanding the conditions of the offense, distinguishing it from related crimes, recognizing the role of intent, and assessing both civil and criminal consequences are essential for market participants. Prevention through strong contracts, ownership verification, reliable guarantees, and staff training can substantially reduce risk. Where the conduct occurs, engaging legal counsel familiar with applicable rules and judicial practice can facilitate effective enforcement of rights and recovery of losses. With transparent commercial practices and strict adherence to legal standards, businesses can reduce costly disputes and support a healthier market environment.

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