Rights of unpaid seller

 

SUBJECT: BUSINESS LAW CLASS:MMRB

SEMEster:6

 

UNPAID SELLER:

ACCORDING to sec45(1) of sale of goods act, seller of the goods is deemed to be unpaid seller:

 

(A)  WHEN whole of the price has not been tendered or paid, or

 

(B) WHEN bill of exchange or negotiable instrument has been received as a conditional payment.

 

section45(2) says The term seller include any person who is in position of seller ,agent who himself pay or is directly responsible for the price 0r an agent of the seller to whom bill of

 

lading has been endorsed ,or a consignor or agent who himself paid or is directly responsible for the price AND the seller of goods can be deemed to be an unpaid seller:

1. if the price become due but they r not paid. HE Must have an immediate right of action for the price.

 

2. A BILL of exchange or negotiable instrument was received but was dishonored.

 

RIGHTS OF UNPAID SELLER

UNPAID Seller has RIGHT:

 

1. RIGHTS against the goods

 

2. RIGHTS against the buyer personally

 

Rights against the goods: can be discussed under two heads:

1.   WHEN property in goods has passed 2.when property in goods has not passed

When property in goods has passed:

following 3 rights are available to the unpaid seller if property in goods has passed to the buyer; (a)RIGHT OF LIEN

(b)RIGHT OF STOPPAGE IN TRANSIT (C)RIGHT OF RESALE

RIGHT OF LIEN:

 

Right of lien : is the right to retain the goods until whole of the price of goods is paid or tendered. Right of lien can be excercised:

 

where goods have been sold without any stipulation to credit.

 

WHERE goods have been sold on credit but period of credit has expired.

 

Where buyer has become insolvent, even though the period of credit has not yet expired RULES regarding lien:

1  lien can be excercised if the seller is in possession of goods. unpaid seller can excercise the right of lien   even if the documents of tittle or property in goods have been transferred. if part delivery of goods is  made ,the seller can excercise the right of lien on the remainder .however if the seller has delivered part of goods so as to show an intension to wave the lien.

 

2.   THE UNPAID SELLER can excercise the right of lien only for price and not for any othr charges

 

3.     right of lien can be excercised by seller only

 

4.       UNPAID seller can ecercise the right of lien even _if he is in possession of goods as bailee or agent

 

5.     UNPAID seller cannot excercise the right of lien if he has expressly waived his right f lien.

 

6.   UNPAID seller does not loses the right of lien even where unpaid seller has obtained decree for the price of goods

 

2  RIGHT OF STOPPAGE IN TRANSIT:

Right of stoppage in transit is a right of stopping the goods in transit after the unpaid seller has parted with the goods. if the goods r in transit he has aright to resume the possession of goods as long as they are in the course of transit .this right is available to the unpaid seller only when the buyer become insolvent and when the goods r in transit.

 

UNPAID seller can excercise the right of lien either- BY taking actual possession of goods.

BY GIVING notice of claim to the carrier or other bailee in possession of goods. And notice can be given either to the principal or to the person in possession of goods.

DURATION OF TRANSIT:GOODS are deemed to be in course of transit from the time they r delivered to carrier or other bailee for the purpose of transmiision to the buyer. the carrier may hold the goods as 1. BUYER' S AGENT 2. SELLer's agent 3.AS AN INDEPENTENT .IN 2 AND 3 HE CAN EXCERCISE THE right of

stoppage in transit.BUT the transit comes to an end

1  if buyer or his agent obtain the delivery before they arrive at the destination

 

2  if after arrival at the appointed destination the carrier acknowledge the buyer or his agent that he hold the goods on his behalf

 

3  where carrier wrongfully refuse to deliver the goods to buyer .

 

3RIGHT OF RESALE: unpaid seller can resell the goods if the goods r of perishable nature

if seller give the notice to buyer of his intention to resell and the buyer does not pay within the reasonable time

if on resale there is loss the seller he can recover from the buyer and if profit must handover to the buyer

 

RIGHTS OF WITHHOLDING DELIVERY:

 

WHEN PROPERTY IN GOODS HASNOT PASSED to the buyer, unpaid seller in addition to other remedies has a right of with holding delivery similar coextensive with the right of lien

RIGHTS OF AN UNPAID SELLER AGAINST THE BUYER PERSONALLY

1SUIT FOR PRICES: WHERE property has passed, the seller can sue for the price

 

2  SUIT FOR DAMAGES FOR NON ACCEPTANCE:WHERE The buyer wrongfully refuse to accept and pay for goods, seller may sue him for non acceptance

 

3  Repudiation of the contract due date by buyer: the seller can treat the contract as subsisting and wait till delivery or he may treat the contract as rescinded and sue for damages

 

4  suit for interest: where there is a specific agreement between seller and buyer as tto interest on the price of the goods from the date the payment become due ,seller can recover the interest from the buyer