MCQs/Cases related to

L8 and L9
MCQ
When the seller is unpaid?
(A)WHEN whole of the price has not been tendered or paid.

(B)WHEN bill of exchange or negotiable instrument has

been received as a conditional payment
(C)When the condition on which the bill was received has
not been fulfilled by reason of the dishonor of the
instrument or otherwise.
(D) All of the above
MCQ
The Right of lien can be exercised when
A. The goods have been sold without any stipulation to
credit.
B. The goods have been sold on credit but period of credit
has expired.
C. The buyer has become insolvent, even though the
period of credit has not yet expired
D. All of the above
MCQ
MCQ
MCQ
 MCQ
“An unpaid seller can exercise the right of Stoppage in
Transit, when the carries holds the goods___” Identify the
correct option?
A.As seller’s agent
B.As buyer’s agent
C.As agent of both of them
D.In his own name
 MCQ
An unpaid seller has not given notice of resale to the buyer
if there is profit. What he is supposed to do?
A.Bound to hand it over to the buyer
B.Not Bound to hand it over to the buyer
C.Dispose it in any manner he likes
D.May set it off in any previous loss
 Case
A sells quantity of sugar in A’s warehouse. It is agreed that
B shall get two month’s credit. A allows the sugar to remain
in A’s warehouse. B becomes insolvent and the official
receiver demands delivery of sugar without offering to pay.
What are the rights of A?
 Solution

Decision: Yes, A can exercise his right of lien

Explanation (Hint)- He is not bound to
deliver the goods to the official till he is paid.
Sec 47
 T/F

Q. The right of stoppage in transit is an

extension of right of Lien?
A.True
B.False
 Case
Lease Vs Scott Bros.

A sells good to B and transfers him the document of Title of

goods. B pays A through cheque. In fulfilment of contract, B
transfers that document of Title to C. Before C could obtain
the delivery of goods, B’s cheque has been dishonoured. A
gives instructions to stop delivery of goods to C until paid
by. Is A’s action justified? Can, he enjoy the right of lien?
a)Yes
b)No
State reasons
 Solution
Decision: No, A’s action is not justified.
Explanation (Hint)-An unpaid seller’s Right
of lien is defeated against Transferee, who
takes document of title of goods in good
faith. Section 53.
 Case
X sold goods to Y and on Y’s instruction delivers them to
Z(Forwarding agent), whom Y had instructed to ship them
to foreign country. Z does so and while the goods are in
transit. X wants to exercise his right of stoppage in transit
as Y had been declared insolvent. Can he do so?
a)Yes
b)No
State reasons
 Decision-
Decision: No, X can’t have the right of
stoppage in transit
Explanation (Hint)- The transit comes to an
end
If the buyer or his agent on that behalf
obtains delivery of goods before they
arrive at the appointed destination Sec
51(2)
 Case
A charitable trust was running a diagnostic centre, where
patients taking advantage of X-ray, CT-scan were required
to pay for same and only 10 % of them were given free
service. Later on the machine purchased by the trust turns
out to be defective. Can the trust file a case under the
consumer protection act?
 Solution
Decision: No,
Explanation (Hint)- Trust is working for
commercial purpose and trust is not a
consumer
 Case
Prakhar purchased an ISI mark electric iron from Bharat
Electricals. While using ,he found that it was not
working properly. He approached the seller and
complained for the same. The seller satisfies Prakhar by
saying that he will ask the manufacturer to replace this
iron. The manufacturer refused to replace and Bharat
Electricals decided to file a complaint in the consumer
court.
Can Bharat Electricals do this. Why?
 Solution
Decision: No
Explanation (Hint): Bharat Electricals cannot file
a complaint. This is because Bharat Electricals is
not a consumer as per Consumer Protection Act,
1986 because they bought the goods for resale
or for commercial purpose
 Case
Jolly, who got admission in a college, paid Rs 20,000 towards tuition fee,
hostel fee and other charges. Subsequently, he got admission in a
government engineering college and, therefore, demanded the refund of fees
from the college. The college partl y refunded the hostel fee and tuition fee
and retained a major portion of the tuition fee. Jolly wants to file a complaint
against the college for total refund of fees. Will he succeed?
a)Yes
b)No
State reasons
 Solution
Decision: No 
Explanation (Hint): Jolly will not succeed in his complaint against
the college as there was no `deficiency in service' by the latter
under the Consumer Protection Act
 Activity
• Look at the pictures and inform that is
implication of which right of consumer?
?
?
?
?
?