UNPAID SELLER

MEANING OF UNPAID
SELLER
The seller of goods is said to be unpaid

seller:
1)when whole price has not been paid.
2)when bill of exchange or other
negotiable instrument has been
received as conditional payment and
the condition has not been fulfilled by
any reason of dishonor of instrument.

EX. A sell goods to B on credit of

three months .After 3 months B

didnt pay the price .Here A will be
regarded as an unpaid seller.
In the above example if A accepts
a bill of exchange and it is
dishonored by bank on due date , A
will be considered as unpaid seller.

Right of unpaid seller

Against the goods
Where the property in the goods has passed
Lien
Stoppage

in transit

Re-sale

Where the property in the goods has not passed

Withholding

delivery
Stoppage in transit
Against the buyer personally

Suit for price

Suit for damages
Repudiation of contract
Suit for interest

MEANING OF RIGHT OF
LIEN:Lien means retain the

possession of goods ,not the

ownership .Here a seller can
take back the possession of
goods from the buyer if he
doesnt pay the money on the
due date(if buyer also become
insolvent).

EX.

A is a seller who sell goods to

the buyer B for Rs. 1000 but b
says to make payment after 30
days but later on seller finds that
buyer b is not able to make
payment due to insolvency, so he
can take the goods back from the
buyer.

RIGHT OF STOPPAGE IN TRANSIT

When the buyer of goods become

insolvent ,the unpaid seller who

has parted the possession of goods
has right of stopping them in transit
until the payment is made.
here ownership is with buyer but
the goods are in possession of
seller or his agent.

X sold goods to Y for RS.200000 .Y said

that he will make payment at the time of
delivery ,then X sends the goods through
truck , but on the way seller receives a call
from buyer where he get to know that Y is
not able to make payment. X retains the
possession of the goods by stopping the
goods in transit.
Here ownership is changed but the
possession of goods is with seller until
buyer makes the payment

EX.

RIGHT OF RE-SALE:If a buyer is not able to pay the money then

seller can sell the goods to other person

without asking buyer(if goods are perishable
, and if non-perishable only by giving prior
notice) .
If seller makes profit by reselling them , then
he is not liable to pay surplus if any to the
buyer
If occurring loss then seller must claim first
by giving prior notice to buyer for the loss
occurred.

. A seller sell bike to y .Y

says he will make payment
after 30 days but y is unable
to make payment on due
date.
Here seller can re-sell
bike to another person by
giving him prior notice.

Ex

RIGHT OF WITHHOLDING
DELIVERY
When the property in goods

has not passed to buyer ,the

seller has a right to withhold
the delivery of goods

Ex. K sold goods to m for Rs

50000 for which he receives

cheque and paid it into bank
.But during delivery period he
finds that cheque is bounced
from bank so the seller k
withhold the delivery of goods
until the payment is made.

SUIT FOR PRICE

In this if goods are at the point of

delivery but buyer said that he is not

able to pay full money at a time so at
this moment in case of perishable
goods seller will say keep goods with
you and with non perishable goods
seller can retain the goods
The seller can sue for the price if
buyer is not giving the money for
perishable goods

. A sell tomatoes of 500 kg to b. B

says he will make half payment and
balance after 20 days
here seller can give goods to buyer
as there is perishable goods
Ex. A sell car to b for Rs. 1.5 lakhs to
b ,but B says he will make payment in
after 30 days
here seller can deny for sale of the car
EX

SUIT FOR DAMAGES:In this if the buyer has

purchase some goods but full

payment has not been made .If
the seller is retaining the
goods and the goods have
some damages ,then seller can
sue for damages made to
goods not for the whole price.

Ex.A sell television to B for Rs.

15000. B makes half payment and

for balance he said he will pay
after 45 days .But on due date he
is not able to pay the same and
seller while reposseing the
television finds that sound is not
clear of television so, here seller
can sue for the damages

SUIT FOR INTEREST:In this if seller sell goods to

buyer but buyer is not able

to pay the sum before the
due date so seller can sue
the buyer to make payment
of interest for the period
beyond the due date.