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.

2.

Buyer lawfully obtains

possession of goods.

3.

Seller waives his right

of lien.

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Sale generally not rescinded by lien or
stoppage in transit

Right of stoppage in transit is lost when:

whe

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
goods to buyer/his agent

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