Unpaid Seller (2)

8/8/2019 Unpaid Seller (2)

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SUBMITTED BY:B.Naveen Swaroop -01V.Sampath -06A.Chaitanya Reddy -31P.Naga Malleshwari-32 Joel Raj -34


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According to section 4 of sale of goods act, 1930A contract of sale of goods is a contract where bythe seller transfer or agrees to transfer the

property in goods to the buyer for price


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The term unpaid seller may bedefined as the seller to whom thewhole price of the goods sold has not

been paid.


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The seller of the goods is deemed to be an unpaid

seller within the meaning of this Act:(a) When the whole of the price has not been paid or tendered;( b) When a bill of exchange or other negotiable

instrument has been received as conditional payment andthe condition on which it was received has not beenfulfilled by reason of the dishonour of the instrument or otherwise.


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Where the ownership of the goods has transferred tothe buyer:

In this case, the unpaid seller has thefollowing rights:

(a) Right of lien.- SEC TION 47( b) Right of stoppage of goods in transit.-SEC TION 50

(c) Right of resale .-SEC

TION -54(2)


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Th e Unpaid seller of goods who is inpossession of them is entitled to retain

his possession until full payment ortender of the price is made


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This right is contained in sec-50 of sale of goodsact, which provides that the buyer becomesinsolvent , and the unpaid seller has partedwith the possession of the goods, he can stopthe goods in transit until the full price is paidor tendered to him


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The unpaid seller can exercise the right to resalethe goods under the following conditions:When the goods are of perishable in nature. Insuch a case the buyer need not be informed ofthe intention of re-saleWhere he gives notice to the buyer of his

intention to re-sell the goods and the buyerdoes not within a reasonable time pay ortender the price


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R i t t s e f r t e rice(Secti 55)R i t t s e f r t e a a es

(Secti 56)

R e i ti f c tr ct ef ree te( ecti )it f r i terest [secti ( ) ]


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Where the buyer fails to pay theprice of the goods in terms of the

contract, of the seller can file a suitagainst the buyer for the recovery ofthe price


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Where the buyer wrongfully neglects orrefuses to accept and pay for the goods,

the seller may sue him for damages fornon acceptance. As regards measure ofdamages,section-73 of the Indian contractAct,1872,applies


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Where the buyer repudiates the contract beforethe date of delivery, the seller may treat thecontract as rescinded and sue damages for thebreach. This is known as the rule ofanticipatory breach contract


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Where there is specific agreement between theseller and the buyer as to interest on the priceof the goods from the date on which paymentbecomes due, the seller may recover interestfrom the buyer. If, however there is no specificagreement to this effect, the seller may changeinterest on the price when it becomes due suchday as he may notify to the buyer


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V arun had bought goods from Salim, and had agreed to paythe price of the goods bought by him at a later date.However , V arun had left the goods to him (V arun) at a later date. In the mean time, V arun had become insolvent , Under these circumstances,will Salim the seller, Have the right toexercise his lien on the goods unpaid for?

Answer- Yes, Under sec 47 of sale of goods act. Salim, theunpaid seller can exercise his right of lien on goods unpaidfor. Since V arun has become insolvent and can not pay for the goods.


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Unpaid Seller (2)