Rights of an unpaid seller Unpaid seller When seller of goods-deemed to be unpaid seller a) Whole of the price has not

been paid or tendered b) Where a bill of exchange/other negotiable instruments have been received as a conditional payment i.e. subject to the realization and the same has been dishonoured. Not an unpaid seller 1. Goods on credit, when term of credit expires, seller becomes unpaid seller. 2. Seller-refused to accept-valid tender of price 3. When seller received price, but has a right to claim the expenses relating to the sale only. 4. When buyer rejected the goods after payment of the price. Rights
Unpaid seller

Against the goods

Against buyer personally

Where the property in the goods has passed Sec 46(1)

Where the property in the goods has not passed Sec 46(2)

Suit for price Sec 55

Suit for damages Sc 56

Lien Sec 47 to 49

Stoppage in transit Sec 50-52

Withholding delivery

Stoppage in transit

Repudiation on contract Sec 60

Suit for interest Sec 61

Resale Sec 54

Right of Lien Meaning of lien A lien is a right to retain the possession of goods until some claim due against it is satisfied. Unpaid seller retain possession of them until payment o tender of price.(see 47(1)) General rules 1. Possession of goods sold 2. Actual possession and not on title 3. As an agent / bailee for the buyer

4. Not sold on credit 5. Term of credit must have expired ,(if it is sold on credit) 6. part delivery exercise right on the remainder 7. seller-waived his right either expressly /impliedly 8. Does not lose his right-he obtained a decree When lien can be exercised -Sold without any stipulation as to credit -If goods sold on credit, term of credit has expired -Buyer becomes insolvent. Termination/loss of lien 1. When he delivers the goods to a carrier or the bailee 2. When the buyer obtains possession of the goods law fully 3. when the seller waives his lien-expressly/impliedly 4. when sub sell is made 5. when documents of title are transferred to a third party 6. when seller misleads others Right of stoppage of goods in transit Exceptions 1. part delivery 2. obtain a decree 3. right of stoppage in of goods in transit The right of stoppage of goods in transit means the right of an unpaid seller to stop further transit of the goods with a view to gain actual or constructive possession of the goods till the price is paid When right to stoppage can b exercised? (Sec 50) 1. unpaid seller 2. parted with the possession of goods to a carrier 3. goods a in a transit 4. insolvent/buyer of the goods 5. if other provisions or of the act do not disallow Duration of goods in transit Goods-deemed to be in transit 1. Until the buyer takes delivery of the goods 2. When the buyer rejects the goods 3. When the carrier holds goods as a carrier -as buyers agent -as sellers agent -as a carrier 4. When part delivery does not imply delivery of the whole When right of stoppage in transit is lost/comes to an end 1. When the buyer obtains delivery at the destination

2. 3. 4. 5.

When When When When

buyer obtains delivery before destination the carrier acknowledges to the buyer carrier wrongfully refuses to deliver part delivery implies the delivery of the whole.

Modes of exercising right of stoppage in transit 1. By taking actual possession of the goods 2. By giving notice of his claim to the carrier Effect of Sub-sale or pledge by buyer 1. Sale by consent of the seller 2. Transfer of documents of title by way of sale 3. Transfer of documents of title by way of pledge. Relation between right of stoppage in transit and lien Right of stoppage in transit is an extension of the right of lien

Distinction between right of lien and right of stoppage in transit Basis of Distinction Possession of goods Right of Lien In order to exercise lien, seller must be in possession of the goods Right of stoppage in transit In order to exercise the right of stoppage in transit, the carrier or the other bailee must be in possession of goods on behalf of the seller. Right of stoppage in transit is a right to regain possession Seller gets the right of stoppage in transit only when the buyer becomes insolvent Right of stoppage in transit commences when the seller delivers goods to a carrier This right can be exercised by the seller through the carrier or bailee of the goods.

Nature and purpose of right Availability of the Right End and commencement of right Exercise of right

Right of lien is a right to retain the goods until price due against it, is paid Seller gets right of lien when the buyer fails to pay Lien comes to an end when the seller delivers the goods to a carrier or bailee Lien can be exercised by the seller himself.

Right of resale When can he resale 1. Where the goods are of perishable nature 2. When notice is given but the buyer does not pay 3. When seller expressly reserves right of resale Treatment of loss or profit when notice is given Other important provision 1. Sale not generally rescinded by lien or stoppage in transit 2. Good title of the buyer even resale without notice

1. 2. 3. 4.

Suit Suit Suit Suit

for for for for

Rights against the buyer price damages for non acceptance repudiation of contract before due date interest

Suit for price Where the property has passed to the buyer Where price is payable on a day certain Suit for damages for non acceptance For damages non acceptance Reasonable charges care & custody of the goods Suit for repudiation of contract before due date Rescinded and sue for damages Treat contract as subsisting and wait till the date of delivery Suit for interest On the amount of the price from the date of the tender of the goods or from the date on which the price was payable Buyers 1. 2. 3. 4. 5. 6. remedies/rights against the seller Suit for damages for non delivery suit for specific performance of the contract suit for breach of warranty suit for damages for repudiation of contract before due date suit for refund of price suit for interest