Legal Definitions - entrusting

Definition: Entrusting is a legal term used in commercial law. It refers to the act of transferring possession of goods to a merchant who deals in goods of that type. The merchant can then transfer the goods and all rights to them to a purchaser in the ordinary course of business.

Example: Let's say you own a jewelry store and you entrust a diamond necklace to a trusted merchant who deals in jewelry. The merchant can then sell the necklace to a customer in the ordinary course of business, and the customer will have all the rights to the necklace.

Explanation: This example illustrates how entrusting works in commercial law. By entrusting the diamond necklace to the merchant, the owner of the jewelry store is giving the merchant the right to sell the necklace to a customer. The customer who buys the necklace from the merchant will have all the rights to the necklace, even though the original owner of the necklace was not involved in the sale.