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LOUISE MERRETT

TRINITY COLLEGE
COMMERCIAL LAW LECTURES 2013 -2014
SALE OF GOODS (5)
SELLERS REAL REMEDIES
Intr!"#t$n
1. Section 39 SGA provides:
Subject to this and any other Act, notwithstanding that the property in the goods may have passed
to the buyer, the unpaid seller o goods, as such, has by implication o law !
"a# a lien on the goods or right to retain them or the price while he is in possession o
them
"b# in the case o the insolvency o the buyer, a right o stopping the goods in transit ater
he has parted with possession o them$
"c# a right o re!sale as limited by this Act
%. Section 39"%# SGA provides:
where the property in the goods has not passed to the buyer, the unpaid seller has "in addition
to his other remedies# a right o withholding delivery similar to and coe&tensive with his rights
o lien or retention and stoppage in transit where the property has passed to the buyer.
Un%&$! '())(r' )$(n
'eaning o unpaid seller
3. Section 3( SGA provides:
"1# )he seller o goods is an unpaid seller within the meaning o this Act !
"a# when the whole o the price has not been paid or tendered$
"b# when a bill o e&change or other negotiable instrument has been received as
conditional payment, and the condition on which it was received has not been ulilled by
reason o the dishonour o the instrument or otherwise
"%# *n this part o this Act +seller, includes any person who is in the position o a seller,
as, or instance, an agent o the seller to whom the bill o lading has been indorsed, or a
consignor or agent who has himsel paid "or is directly responsible or# the price
-. )he ollowing points should be noted:
"1# reers to the *&#t o being unpaid ! applies whether or not payment is due
according to the contract ie even o sold on credit.
"%# in relation to instalment contracts ! relates to any part o the goods i any o
the price is outstanding
"3# .erson who is in the position o a seller includes a buyer who agrees to re!sell
but does not include buyer who has rejected goods and is see/ing to recover price
paid.
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0hen the lien arises
1. Section -1"1# SGA provides:
"1# Subject to this Act, (1) the unpaid seller o goods who (2) is in possession o them is
entitled to retain possession o them until payment or tender o the price in the ollowing
cases:
"a# (3) where the goods have been sold without any stipulation as to credit$
"b# (4) where the goods have been sold on credit but the term o credit has e&pired$
"c# (5) where the buyer becomes insolvent.
"%# the seller may e&ercise his lien or right or retention notwithstanding that he is in
possession o the goods as agent or bailee or custodian or the buyer
1+ "n%&$! '())(r ! see above.
2+ ,- $' $n %''(''$n ! the seller must retain possession o the goods.
o Valpy v Gibson "1(2-# - 34 (32: S sold cloth to 4 and sent it to shipping agents in -
cases re5uesting them to put them on board as directed by 4. 6eld that property and
possession passed to 4 at that point. 47s agent ordered them to be returned to S to be
repac/ed in ( cases instead o -. S was still in possession o goods when 4 declared
ban/rupt. 6eld too late or S to claim unpaid seller7s lien.
%&rt !()$.(r/
8. Section -% SGA provides:
where an unpaid seller has made part delivery o the goods, he may e&ercise his lien or right
o retention on the remainder, unless such part delivery has been made under such
circumstances as to show an agreement to waive the lien or right o retention
30 4 &n! 5 ,-(n & )$(n (1$'t'
2. 9ot every unpaid seller has a lien one o the conditions in subsections "a# ! "c# must be
satisied. :n the meaning o insolvency see s 81"-#: deemed to be insolvent i he has
either ceased to pay his debts or cannot pay his debts as they become due.
;&tent o the lien
(. )he lien under the Act is or payment o the price ! it does not e&tend to any other
e&penses eg storage.

o Somes v British "1(8<# ( 6=3 3%(
)ermination o the lien
9. )he lien will be lost in the ollowing situations:
"a# >ull price is paid or tendered
"b# ?nder Section -3 SGA which provides:
"1# )he unpaid seller o goods loses his lien or right o retention in respect o
them !
"a# when he delivers the goods to a carrier or other bailee or custodier or the
purpose o transmission to the buyer without reserving the right o disposal o the
goods$
%
"b# when the buyer or his agent lawully obtains possession o the goods$
"c# by waiver o the lien or right o retention.
"c# ?nder section -2 SGA which provides:
"1# Subject to this Act, the unpaid seller7s right o lien or stoppage in transit is not
aected by any sale or other disposition o the goods which the buyer may have made, unless
the seller has assented to it.
"%# 0here a document o titled to goods has been lawully transerred to any person as
buyer or owner o the goods, and that person transers the document to a person who ta/es it
in goods aith and or valuable consideration, then !
"a# i the last!mentioned transer was by way o sale the unpaid seller7s right o lien or
retention or stoppage in transit is deeated$ and
"b# i the last!mentioned transer was made by way o pledge or other disposition or
value, the unpaid seller7s right o lien or retention or stoppage in transit can only be e&ercised
subject to the rights o the transeree.
1<. :n what amounts to +assent, see:
o Mourdaount Bros v British Oil and Cake Mills Ltd @191<A % B4 1<%. S contracted to
sell various lots o boiled linseed oil to 4 who resold to '. ' had paid most o price
to 4. .ossession remained with S who had not been paid. Celivery orders sent by 4
to S directing them to deliver ' ! entered in S7s boo/s. *t was held that these acts did
not constitute an +assent, by s or the purposes o s -2"1#. 'ust be such as to show s
renounces his rights in goods. 9ot enough that he ac/nowledges receipt o ino that
there has been a sub!sale and ac/nowledge that sale.
o c DF Mount Ltd v Jay & Jay !rovisions" Co Ltd @198<A 1 D4 119. S sold 4 %1<
cartons o canned peaches. 4 made it plain would pay the price rom moneys he
would receive rom his own customers when the goods were re!sold. S made out %
delivery orders in avour o 4. 4 sent them to the warehouse. 4 agreed to re!sell to
', received the price, drew up a delivery order and sent it to the warehouse. 6eld s
-2 did apply to unascertained goods and there had been assent. Cistinguished
'ourdaount on the basis that in that case S had no reason to doubt 47s ability to pay
plus only /new about the sub!sale ater it was carried out. 6ere S an&ious to get rid o
goods on a alling mar/et. Bnew goods could only be paid or rom money obtained
on re!sale and could only obtain money on delivery. *n all the circumstances
assented to 4 re!selling.
11. :n the re5uirements o s -2"%# see:
o Mount Ltd "op #it# "must be t-( '&2e document o title which is transerred#.
1%. :n aect on the lien or right o stoppage see:
o *n relation to a pledge "ie s -2"%#"b## the decision o the 6ouse o =ords in $emp
v Falk "1((%# 2 App 3as 123. 4 pledges goods E S can still e&ercise the right o
stoppage in transit but subject to the right o the pledge ie can claim return o the
goods i prepared to pay o the pledge. 0hat is more, i pledgee retains goods
and sells them, entitled to claim that the balance o the purchase price is paid to
him not S.
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o 3 in the case o a re!sale "ie s -2"%#"a## %& parte Goldrin' Davies & Co Ltd
"1((<# 13 3h C -8%. A sold to 4 who sold to 3 beore despatched by A. 4ill o
lading ta/en in 37s name but beore transer 4 became insolvent. A claimed to
be entitled to intercept money beore paid to 4. ie 5uestion was not whether he
could retain possession, but whether S could intercept the money paid rom 4% to
41. 3ourt o Appeal said he could. Coubted by =ord Selborne in $emp.
*nconsistent with s -2"%# which provides i bill o lading transerred lien deeated
which must mean or all purposeF
St%%&3( $n tr&n'$t
13. Section -- SGA provides:
Subject to this Act, (1) when the buyer o goods becomes insolvent (2) the unpaid seller who
has parted with the possession o the goods has the right o stopping them in transit, that is to
say he may resume possession o the goods (3) as long as they are in the course o transit, and
may retain them until payment or tender o the price
Ge5uirements
1+ 4"/(r * 3!' 4(#2(' $n').(nt ! see above
2+ "n%&$! '())(r ! see above

3+ !"r&t$n * tr&n'$t
1-. Section -1 contains 2 sub!sections setting out various rules on duration o transit. )hey
relect the essential eature being that the goods are in the possession o a middle man
between the seller, who has parted with them, and the buyer who has not yet received
them.
S !!!!!!!!!! 3 !!!!!!!!! 4
11. >or e&ample in (eddall v )nion Castle Mail SS Co Ltd "191-# (- =HB4 38< : where
goods are delivered by S to a carrier and pass at each successive stage o transit rom
hands o one carrier to another to the destination indicated by 4 to S ! transit continues.
Coes not matter who actually communicates the instructions. Cierent i, as in this case,
4 intervenes and sends to a dierent destination ! that ends right o stoppage in transit.
'ethods o e&ercising right o stoppage in transit
18. Section -8 provides:
"1# the unpaid seller may e&ercise his right o stoppage in transit either by ta/ing
actual possession o the goods or by giving notice o his claim to the carrier or other
bailee or custodier in whose possession the goods are
12. .osition as between vendor and carrier can be summarised as ollows:
"1# i carrier to whom notice o stoppage has been sent wrongly delivers goods to
the buyer, liable or conversion.
"%# carrier has a lien over goods or reight due which ta/es priority over seller7s
right o stoppage
-
)ermination o the right o stoppage in transit
1(. Similar to lien ie. 0hen primary re5uirements are no longer met eg. paid in ull or under s
-2 SGA.
R(-'&)( 4/ t-( '())(r
19. )here are % distinct aspects to consider:
"1# the %,(r o a seller to re!sell ie give good title$
"%# the r$3-t o a seller to re!sell ie without committing a breach o contract with
the original buyer.
.ower o the seller to resell
%<. )he seller has power "but not necessarily right# to transer a good title to a second buyer:
"a# when at the time o resale he has property in the goods
"b# under section %- "or s ( >actors Act# ie. seller in possession
"c# where he has e&ercised a lien or right o stoppage ! see section -("%# SGA
which provides:
when an unpaid seller who has e&ercised his right o lien or stoppage in transit re!sells the
goods, the buyer ac5uires a good title to them as against the original buyer
)he right o the seller to re!sell
%1. )he seller has the right to re!sell the goods i the buyer is in repudiatory breach.
%%. 6owever, the act that the 4 is late in paying the price does not necessarily o itsel
amount to a repudiation. 6owever, section -("3# provides:
0here the goods are o a perishable nature, or when the unpaid seller gives notice to the buyer
o his intention to re!sell, and the buyer does not within a reasonable time pay or tender the
price, the unpaid seller may re!sell the goods and recover rom the original buyer damages or
any loss occasioned by his breach o contract.
%3. )hese provisions ma/e time o payment o the essence in cases o sale o perishable
goods, and allow the seller in other cases to ma/e time o payment o the essence by
giving notice to the buyer.
%-. As to whether the eect o such a sale is to accept the buyer7s deemed repudiatory breach
E hence terminate the contract see:
o Galla'her v Shil#ok @19-9A % B4 281: >innemore H held that sale under s -("3#
did not rescind the original contract o sale. Accordingly i property had passed
to 4 acting as 5uasi pledgee not owner. 4 remained liable or the price and could
obtain proit i one made.
o C* +ard v Bi'nall @1982A 1 D4 13-: .s sold % cars to C who repudiated and
reused delivery. S gave notice that i he did not pay within 1 days would re!sell.
'anaged to re!sell one car. 6eld not entitled to sue or price on the other ! resale
had rescinded the contract ! liable or damages or non acceptance.
o 3 section -("-# which deals with a dierent point.
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where the seller e&pressly reserves the right o re!sale in case the buyer should ma/e a
deault, and on the buyer ma/ing deault re!sells the goods, the original contract o sale is
rescinded but without prejudice to any claim the seller may have or damages
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