Q.
What is the meaning of 'Nemo dat quod non habet'? Why is it related to tort law?
A.
Nemo dat quod non habet, literally meaning "no one gives what he doesn't have" is a legal rule, sometimes called the nemo dat rule, that states that the purchase of a possession from someone who has no ownership right to it also denies the purchaser any ownership title. It is equivalent to the civil (continental) "Nemo plus iuris ad alium transferre potest quam ipse habet" rule, which means "one cannot transfer more rights than he has".
The rule usually stays valid even if the purchaser does not know that the seller has no right to claim ownership of the object of the transaction (a bona fide purchaser); however, in many cases, more than one innocent party is involved, making judgment difficult for courts and leading to numerous exceptions to the general rule that aim to give a degree of protection to bona fide purchasers and original owners. The possession of the good of title will be with the original owner.
In contract law, the contract of sale of goods from one party to another becomes voidable when there is no free consent. However, if the contract is affecting third party, who is not in the contract - e.g. A buys car from B, but the car is actually not B's car. It is C's car. The contract becomes tainted.
Making a contract within a contract - in the above example, A has a contract with B, B has a contract with C. A would only get his car if B is able to get the car from C. This is kind of reciprocal contract with B, is dependent on B's contract with C. If C does not sell the car to B, B cannot sell the car to A.
Hence, this condition of 'no one gives what he doesn't have' can upset the contract. The right of third party may impair the contract. In most of the cases, the contract is not voidable because there is a third party involved. The contract between A and B cannot disadvantage the third party C.
Ref:
https://en.m.wikipedia.org/wiki/Nemo_dat_quod_non_habet