UNPAID SELLER

AND HIS RIGHTS

Priya Khade P1022 Charusheela Khandale P1024 Kinnar Majithia P1026 Saloni Marphatia P1028 Arjun Mishra P1030

Who is an Unpaid Seller?

Seller who has not been paid (either in the whole or partial) One who has received payment in the form of bill of exchange or other negotiable instrument which has been dishonored

Rights of an Unpaid Seller

When property of goods passed to buyer

Right of Lien Right of Stoppage in Transit Right of Resale

When property of goods not passed to buyer

Right of Withholding Delivery
Other Rights

Overview of rights of Unpaid Seller

RIGHT OF LIEN
Possession is essential to create right of
lien

Lien is of two kinds:

1. General Lien 2. Particular/Specific Lien

Right of Lien of Unpaid Seller Sec. 47

Applicability:
Goods sold without any stipulation as to credit Goods sold on credit, credit-term expires

Buyer becomes insolvent, seller possesses goods

Sec. 48 - Part Delivery of Goods

Right of lien applicable to undelivered goods unless agreement to waive lien has been made
Delivery of the part does not constitute the delivery of the whole

Sec. 49 Termination of Lien

1.

Seller delivers goods to carrier/bailee for transmission to buyer without reserving right of disposal of goods. Buyer lawfully obtains possession of goods. Seller waives his right of lien.

2.

3.

Right of Stoppage in TransitSection 50

Essentials Seller must be partially/wholly unpaid Buyer must have become insolvent Goods must be in transit

Eg: Seller has parted with possession of goods and buyer has not received the goods

Section 51 Duration of Transit

Transit ends when: Buyer takes delivery of goods Buyer/his agent takes deliver of goods before appointed destination i.e. in anticipation Carrier/bailee at appointed destination acknowledges possession of goods Carrier/bailee wrongfully refuses to deliver goods to buyer/his agent

Buyer refuses the goods: If buyer refuses goods-transit does NOT come to an end, even if seller refuses to take them back. Goods continues to be in possession of bailee

Section 52: How Right of Stoppage in transit is effected by the seller: Taking actual possession of goods Giving notice of his claim to carrier/bailee who possesses goods or to redirect goods to seller or according to his directions
Sale generally not rescinded by lien or

Right of stoppage in transit is lost when:

Buyer/his agent obtains delivery of goods from carrier/bailee After arrival of goods at appointed destination, carrier/bailee acknowledges to buyer that he holds goods on his behalf Carrier/bailee wrongfully refuses to deliver

Right of Resale of unpaid seller -Section 54

Unpaid seller can resale his goods after executing his Right of Lien on retaining his goods or after exercising his Right to Stoppage in Transit upon insolvency of the buyer under some circumstances.

Circumstances for Resale:

Where goods are perishable Where seller gives notice to buyer of his intention to resell and buyer does not pay the price within a reasonable time after the notice Where seller has expressly reserved his right of resale in case of default

If the seller has given notice to the buyer:

He can hold the buyer responsible for

loss suffered due to breach of contract.

Profits earned on resale are retained by the unpaid seller.

If notice has not been given to the buyer:

Seller cannot recover damages from buyer. Seller has to pay the profits if any to the buyer. Seller can claim difference between the contract price and the market price at the date of the breach.

If property in goods has not passed to buyer, seller has the Right to Withhold Delivery.

Section 25-Reservation of Right of Disposal This is retained by seller when the seller imposes certain conditions and until conditions are fulfilled.

Sec. 55 & 56 Other Rights

Sue the buyer for price of goods Seller may sue buyer for damages for wrongfully neglecting/refusing to accept the goods Recover interest from buyer where there is a specific agreement to that effect. If there is no agreement, seller may charge interest on price when it becomes due.

Effect of Sub-Sale or Pledge by buyer-Section 53

In case of transfer of goods by buyer, the unpaid sellers right of lien or stoppage in transit can be exercised subject to rights of transferee. When pledgee sells goods, the unpaid seller is entitled to receive the surplus sale proceeds.

THANK YOU