Define Unpaid Seller
According to section-45 of the Sale of Goods Act, 1930 a seller is called an unpaid seller so long as any portion of the price remains unpaid.
In other words the seller of goods is known as an unpaid seller when the whole of the price has not been paid or tendered.
Some Important points about Unpaid Seller
- Sellers Line
- Where the goods have been sold on credit but the term of credit has expired.
- When the buyers become insolvent
- Where the goods have been sold without any stipulation as to credit.
Rights of an Unpaid Seller
The sale of goods act has given two kinds of rights to an unpaid seller of goods they are:
A.Right against the goods
i.Rights of lien
ii.Rights of stoppage of goods in transit.
iii.Right of resale
iv.Right of withholding delivery
B.Right against the buyer personally
i.Right to sue for the price
ii.Right to sue for damages
iii.Right to sue for interest.
Rights of Unpaid Seller against the goods
Right of lien
According to sec-47 to 49 goods in his possession the rights of lien refers to retain the possession of goods until the payment in respect of them is paid.The right of lien is terminated by delivery of goods to the buyer or carrier.
Rights of stoppage of goods in transit
The right of stoppage means the right to step further transit oif the goods. According to sec-50 to 52 the unpaid seller has the right to stop the goods from further transit in order to regain the possession of goods.
Then he may resume possession of the goods as long as they are in the course of transit and may retain them until payment.
Unpaid Seller can stop the goods in transit in some causes they are:
- While the goods are out of actual possession of the seller but not reached to the buyer.
- The unpaid seller can stop the goods in transit only for payment of the price of the goods and not for any other goods.
- When the buyer becomes insolvent before paying for the goods.
The Unpaid Seller can’t stop goods in transit in the following cases:
- When the goods reached the actual or real destination.
- While the buyer takes possession of delivery even if it has not reached its actual destination.
- Part delivery of goods to the buyer.
- When sub sale or other disposition by the buyer has been done with the seller’s consent.
Rights of resale
According to sec-54 the unpaid seller has the right to resale the goods the price of which is not fully paid by the buyer. The unpaid seller has the additional right along with the right of lien and stoppage in transit.
- When the goods are of perishable nature.
- When the nature is given by the buyer doesn’t pay.
- When the unpaid seller has expressly reserved a right of resale if the buyer is a defaulter in making the payment.
Rights of withholding delivery
The right of withholding delivery is similar with the right of lien and stoppage in transit the such right can be exercised even if the sale was a credit or the goods were uncertain.
The Unpaid Seller has made withholding delivery of the goods, he may exercise his rights of line on the remainder unless such part of withholding delivery has been made under such circumstances as to show an agreement to waive the lien.
Rights of unpaid seller against the buyer personally
In addition to the right of an unpaid seller against the goods he has the following right against the buyer personally.
Right to sue for the price:
According to sec-55 the unpaid seller has a right against the buyer to sue for the price of goods. The unpaid seller has only remedy to sue for the price after the loss of possession.
Right to sue for damages:
According to sec-56 the unpaid seller has a right to sue for damages of goods where the buyer wrongfully refuses to accept the goods.
Right to sue for interest:
According to sec-61 the unpaid seller has a right to sue for the interest on the price of goods where the buyer wrongfully refuses to accept the goods and pay for them.
