PART 1 1.PERFORMANCE OF A CONTRACT OF SALE OF GOODS. Duties of the Seller and the buyers. Delivery and Rules regarding delivery. Passing of Property in Goods in the Case of Foreign Trade 2.UNPAID SELLER AND HIS RIGHT Who is an unpaid Seller? Rights of an Unpaid Seller. Lien on Goods. Right of Stoppage in transit.
PART 2 How the right of stoppage in transit effected? & effect of sub sale or pledge by buyer Right of resale. 3.REMEDIES FOR BREACH OF A CONTRACT Suit for price Suit for Damages for Non-acceptance. Suit for Interest. Buyer s Remedies against Seller.

unless the seller is ready and willing to give delivery. However.Terms of the contract 2. delivery and payment of the price are concurrent conditions.32) The seller has the duty of giving delivery of the goods according to the : 1.if the buyer is not willing to pay the price.31). no delivery need be given . nor needs the buyer pay the price. .(s. in accordance with the terms of the contract of sale (s. as unless otherwise agreed.Rules contained in the Act.DUTIES OF THE SELLER AND THE BUYER It is the duty of the seller to deliver the goods and of the buyer to accepts and pays for them.

2(2)].In the case of constructive or attornment. who holds the goods as bailee for the seller agrees and acknowledges to hold them for the buyer. who is in possession of goods hold them as bailee of the buyer after the sale. 3.The delivery of goods therefore. This type of delivery may be effected in three ways: Where the buyer. 1. symbolic or constructive. but there is only an acknowledgment by the person in possession that he hold them on behalf of another. there is neither change of physical possession of good.Delivery: Delivery is defined as a voluntary transfer of possession from one person to another [s.In the case of the actual and physical delivery the possession of the goods is handed over by the seller to the buyer.  Where the 3rd person. who is already in possession of the goods as bailee of the seller holds them as his own. it is made by the delivery some symbol that carries with it the real passions or control over goods. nor delivery of a symbol. Were the seller. 2.In the case of symbolic delivery. . like a carrier or a warehouseman. may be actual. after the sale.

Place of delivery.38) 9. the seller is not bound to delivery goods. Installment delivery. Where goods are delivered to a buyer.RULES REGARDING DELIVERY The following are the rules regarding delivery of goods: 1.{s.2. Delivery of wrong quantity. Delivery of part of goods sold many amount to delivery of the whole if it is so intended and agreed.39).43) 12.41) 11.37{1.34) 2.{s.44) . 7.3}) 8. which he has not personally examined.(s.(s. Unless otherwise agreed. till the buyer applies for delivery (s. 3.(s. Buyer not bound to return the rejected goods. Demand for and tender of delivery must be at a reasonable hour. 10.35).(s.36(1)} 4. Liability of the buyer. Delivery to the carrier or wharfinger (s.(s. Unless agreed otherwise.(s. the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller. Time of delivery. 6.36(2)} 5.

B) or Free on Air(F.A) Cost.I. FREE ON BOARD (F.O. when price is noted F. There are certain terms which are used in the contract of sale of goods in foreign trade. Therefore. . The most usual of such contract are: Free on board(F. These terms reflect a number of conditions which are either attached by the parties or by custom and practice of business people. Insurance and Freight(C. the risk attaches to the buyer only on shipment of goods.PASSING OF PROPERTY IN GOODS IN THE CASE OF FOREIGN TRADE.B .B): This means that the property in goods passes to the buyer only after the goods have been loaded on board ship and accordingly.O.F) and Ex-ship.O. then the seller or shipper has to bear all the expenses upto and including shipment of goods on behalf of the buyer.O.

. Therefore.B.C. It will. C.I. lost or not lost. the ownership in the goods will not pass until actual delivery. These document are: 1. EX-SHIP CONTRACT: Under this agreement the seller has to deliver the goods to the buyer at the port of destination. Bill of lading. A certificate of origin. 4. The price quotation will include all expenses upto the point of delivery of the goods at the port of destination. be for the exporter to insure the goods to protect his interest.O. Insurance policy. to be implemented by the transfer of certain document. therefore. 2. 3.F CONTRACT: It is a contract for the sale of insured goods .F quotation includes F. Invoice. price plus cost of freight and premium on marine insurance upto the port of destination.I.

. eg. buyer has to pay for it. WHO IS AN UNPAID SELLER ? A seller of goods is an the unpaid seller when (i)the whole of the price has not been paid or tendered. The term seller includes any person who is in the position of a seller. shall have certain rights. In case buyer fails or refuses to pay. or a consignee or agent who has paid for the goods or is responsible for the price (sec 45).(ii)a bill of exchange or other negotiable instrument has been received as conditional payment and the condition on which it was received has not been fulfilled by reason of the dishonor of the instrument or otherwise. the seller. as unpaid seller. In a contract of sale.UNPAID SELLER AND HIS RIGHTS A contract is comprised of reciprocal promises. if seller is under an obligation to deliver agent of the seller to whom a bill of lading has been endorsed.

to recover damages for breach of contract. The rights against the goods are as follows: Where the property in the goods has passed to the buyer. T he rights of an unpaid seller may broadly be classified under two heads. 2.1930:  Rights against the goods. 1872. Right of linen Right of stoppage of goods in transit Right of resale. A. ie.Rights under the sale of Goods Act. Rights against the buyer personally. B. The rights against the buyer personally are: Rights to sue for price Rights to sue for damages Right to sue for interest . namely: 1.RIGHTS OF AN UNPAID SELLER.Rights under the sec 73-74 of the Indian contract Act.

but the term of credit has expired Where the buyer becomes insolvent. An unpaid seller who is in possession of goods is entitled to retain them in his possession until payment or tender of the price in three situations.Akshay leaves the goods with Sudeep to be sent to him later. .Sudeep shall have a right of lien if in the meantime he learns of Akshay s insolvency. Example . namely Where the goods have been sold without any stipulation as to credit Where the goods have been sold on credit .Akshay buys certain goods from Sudeep .LIEN ON GOODS(SEC 47-49).The word lien means to retain possession of.and agrees to pay for them later.

Where the buyer or his agent lawfully obtains possession of the goods 3. without reserving a right of disposal of the goods to himself Where the seller takes a security from the buyer for the payment of the price in place of his lien. The seller waives his right of lien 4. Where the seller assents to a sub-sale by the buyer 5.UNPAID SELLER S LINEN-HOW LOST : An unpaid seller loses his lien in the following five cases: 1. . 2. takes railway receipt or transport receipt in the name of the buyer or his agent. When the seller delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer.

once the possession is lost. however.The lien of the unpaid seller is a possessory lien. Subsequently the buyer becomes insolvent. that is. The seller has no lien on the share certificate or transfer form. does not lose his lien by reason only he has obtained.An unpaid seller.retaining them till the price is paid . . a decree for the price of the goods [sec49 (2)].The right of stoppage in transit is earned only where the right of lien is lost and is available only where the buyer has become insolvent (sec 50). RIGHT OF STOPPAGE IN TRANSIT: This right of the unpaid seller consists in preventing the goods from being delivery to the buyer and resuming and regainining their possession while in transist . Example. for his lien ceased when he parted with their possession. On a sale of certain shares the relevant share certificates and transfer form duly signed are handed over by the seller to the buyer against payment of price by cheque. lien is lost.

the question of duration of transit is of great significance. When does the transit end? The transit comes to end in the following situation: When the goods reach the hands of buyer or his agent. If the buyer or his agent obtain delivery of the goods before the reach their destination.51): Since the right of stoppage in transit can be exercised only during transit.DURATION OF TRANSIT (S. . Where the carrier or the other bailee wrongfully refuse the delivery the goods to the buyer.

Badal refuse to take the goods and stop payment. The goods deemed to be in transit and unpaid seller can take them back. . Anand consigns and forward the goods to Badal. On arrival of goods at Delhi.Example: Badal at Delhi orders goods of Anand at Kolkata.goods are taken to Badal s warehouse and left there.

Or according to the direction of the seller. .How the right of stoppage in transit effected (s. the carrier or other bailee in procession must redeliver the goods to.52)? The unpaid seller may exercise his right of stoppage in transit either by taking actual possession of the goods or by giving notice of his claim to the carrier or other bailee in whose possession the goods are. The expenses of such redelivery shall be borne by the seller. On receipt of the notice from the seller.

Anil s right against the 6 quintals is lost since he recognised the tittle of Chand the sub buyer . Balbir then sell 6 quintal out of 10 to Chand.Anil tell Chand that the grain would be delivered in due course. which the buyer may have made. unless the seller has assented thereto. Chand after reciving from balbir the delivery order present it to Anil.53)-the general rule is that the unpaid seller s right lieu or stoppage in transit is not affected by any sale or other disposition of the goods.Balbir then become insolvent.Effect of sub-sale or pledge by buyer (s. Example: Anil sell to balbir 10 quintals of grain out of a granary.

2. only when the buyer becomes an insolvent.Lien and Stoppage-in-Transit Distinguished S. Stoppage-in-Transit Available only after the seller has parted with the possession of the goods Available. . Lien no 1. even when the buyer is not an insolvent. Available only when the goods are in the possession of the unpaid seller. Available.

‡ Right of resale(sec.54) Seller can resell the goods 1) goods are of perishable nature 2) failure of buyer in payment within a reasonable time Rights of seller 1) recover loss of damages by resale from buyer 2) keeping the profit by resale .

Definition of perishable goods 1) It doesnot cover physical deterioration 2) It includes Commercially Perishable goods (outdated goods) 3) Goods That become un merchantable over a period of time . the buyer should be informed of resale 2) No recovery of loss will be made by the buyer if seller does not give a notice of resale.‡ Rights of the buyer 1) If goods are of non perishable nature. 3) The profit shall go to the buyer that is accrued from resale.

Measure of damages Measure of damages = Contract price .Price during resale + expenses of resale . he is not liable to recover damages for its breach.‡ Exceptions of right of resale If seller has expressly reserved right of resale by contract.

.‡ Time within which the right of resale to be exercised  The seller must exercise the right of resale within a reasonable time  The reasonable time will determined by the facts of the case.

61) .Remedies For Breach Of Contract The seller has the following remedies against the buyer personally:- ‡ SUIT FOR PRICE (S.56) ‡ SUIT FOR INTEREST (S.55) ‡ SUIT FOR DAMAGES FOR NON-ACCEPTANCE (S.

When the property in goods has not passed to the buyer.55) 1. if the price is to be paid on a fixed day irrespective of delivery and the buyer wrongly neglects to pay. S.SUIT FOR PRICE (S. the seller can sue the buyer for the price of the goods. he can only claim for damages. 3. . as a rule. the seller may sue the buyer for the price despite of non-delivery. 2. the seller cannot file a suit for the price. However.55(2) provides that where under a contract of sale. When under a contract of sale the property in the goods has passed to the buyer and the buyer wrongly neglects to pay the price.

. 3.  a reasonable charge for the care and custody of the goods. the seller can recover from the buyer:  any loss occasioned by the buyers refusal to take delivery.SUIT FOR DAMAGES FOR NON-ACCEPTANCE (S. the seller may sue him for damages for non-acceptance. When the seller is ready and willing to deliver the goods and request the buyer to take the delivery. 2. When the property in the goods has not passed to the buyer and the price was not payable without passing the property . the seller can only sue for damages and not for the price.56) 1. which the buyer does not do within a reasonable time . When the buyer wrongfully neglects to accept and pay for the goods.

the seller tenders the goods to the buyer and the buyer wrongfully refuses and pay the price.SUIT FOR INTEREST (S.61) 1. . When under a contract of sale. the seller has a right to claim interest on the amount of the price.

57): where the seller wrongfully neglects to deliver the goods to the buyer. Suit for breach of condition : when seller breach the condition. Damage for non-delivery (s. then buyer can avoid the contract and can reject the goods. In all cases of non-delivery. . b) The contract is not severable and he has accepted the goods part. 2.BUYERS REMEDIES AGAINST SELLER The buyer has the following right against the seller for breach of contract : 1. Right of recovery of price :The buyer is entitled to refund of price. c) The contract is for specific goods and property has passed to him. if already paid. 3. But he cannot reject the goods if:a) He waives the breach of condition and treat it as breach of warranty. 4. Specific performance (s. if the seller fails to deliver the goods. the buyer may sue the seller for damages for non-delivery. the buyer may file a suit for specific performance.58) : in a contract of sale of goods.

. Suit for breach of warranty (s. The buyer can sue the seller for damages.5. 6. Recovery of interest (s. Anticipatory breach (s.59) : where there is a breach of warranty by the seller. the buyer has the option: To treat the contract as repudiated and claim damages  He may keep the contract open till the date of delivery of goods.60) : where the seller repudiated(to reject with denial) the contract before the time for performance has come. or in case where the breach of condition on the part of the seller is being treated as a breach of warranty. 7.61) : if the buyer has already paid the price and the seller fails to deliver the goods on due date. the buyer has a right to sue for interest on the amount of the price.

3.SALE BY AUCTION(S. 4. and auctioneer knowingly takes the bid from the seller. 2. The practice to say three times . The seller or any person on his behalf may bid at the auction. The condition when sale is not notified to be subject to a right to bid on behalf of the seller. When the goods are put up for sale in lots. each lot is deemed prima facie. then this would be treated as fraud. .64) In the case of sale by auction the following Rules apply: 1.

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