Q # 03: Explain the classifications of Civil Law.

1) Introduction
 Unpaid seller means a person who sells the goods for a price but price has not been paid to
him. Unpaid seller has rights against the goods and buyer. Because payment is consideration
and reason of the contract so that payment should be paid timely even partly or wholly. The
seller is not unpaid seller if buyer has offered to pay the price and if seller refuses to accept
it. In such case, the seller loses all the rights against goods and buyer

2) Definition of unpaid seller

 When whole or part of the price of goods has not been paid in such case seller to be called
unpaid seller Or when price of goods remain unpaid even after the expiry of the decided
period in this case seller is to be called unpaid seller

3) Features of unpaid seller

Following are the features of unpaid seller

1) Seller must sell the goods on cash basis and must be unpaid
2) Must be unpaid either wholly or partly
3) The decided period has expired and the price has not been paid to him.
4) If the price is paid through a bill of exchange
5) He must not refuse to accept the payment when he offered

4) Rights of unpaid seller

Following are the two types of rights of a seller

A. Rights of unpaid seller against goods

B. Rights of unpaid seller against buyer

A. Rights of unpaid seller against goods

Unpaid seller has following rights against the goods. Details are as under.

1. Right of possession
 If a buyer fails to pay the price within the decided time, unpaid seller has right to keep
the goods in his possession and he can refuse to deliver the goods to the buyer until due
payment is paid

 When right of possession can be exercised

Following are the conditions when right of possession can be exercised

1) When the goods have been sold without legal agreement

 2) When the goods have been sold on cash basis, but payment is unpaid
3) When the goods have been sold on credit basis, the term of credit has
expired
4) When the buyer become bankrupt even within the decided period

 Termination of right of possession

Following are the conditions when right of possession is terminated

1) When seller delivers the goods to buyer without having the legal right
on goods
2) When buyer has obtained possession lawfully
3) When buyer further sales the goods
4) When seller loses his possession on goods

2. Right of stoppage of goods in transit

 If a buyer fails to pay the price within the decided time, unpaid Seller has right to stop
the goods in transit

 Conditions for stoppage of goods

Following are the condition of stoppage of goods and seller can stop the goods to
deliver to the buyer

1) When the seller must be unpaid

2) When buyer become bankrupt
3) When the goods are not in possession of seller, but have not reached
buyer’s possession such as goods are in transit with career

 Methods of stoppage
Following are the methods for stoppage of goods by the seller. Details are as
under

1) By taking possession of the goods

2) By giving legal notice to the carriers under whose possession the goods are

3. Right of resale
 If a buyer fails to pay the price within a decided time, the unpaid seller has the right to
resell the goods
  Conditions
Following are the condition in which seller can resell the goods. Details are as
under

1) When buyer fails to pay the price of the goods

2) When buyer become bankrupt
3) When the goods are fresh in their nature
4) When unpaid seller has expressly reserved his right of resale
5) After receiving the notice from seller ,buyer does not pay the price , seller
can resale the goods

B. Rights of unpaid seller against buyer

If a buyer fails to pay the price of the goods and unpaid seller has rights against the buyer

4. Suit for price

 When the ownership of the goods have been transferred to buyer and buyer refuses to
pay the price of the goods according to the terms and condition of the contract ,the seller
has right to take legal action against buyer for the price of the goods

5. Suit for breach of contract

 When the buyer cancels the contract before the date of the delivery. The unpaid seller
can take legal action against the buyer in order to recover the damages in the contract

6. Suit for damages for non-acceptance

 When the buyer refuses to accept and pay for the goods, the seller can take legal action
against him for damages for non-acceptance. The seller can recover damages only and
not the full price

7. Suit for special damages and interest

 The seller can take legal action against the buyer for special damages where the parties
are aware of such damages at the time of contract. The unpaid seller can recover interest
at a reasonable rate on the total unpaid price of goods, from the time it was due until it is
paid

5) Conclusion
 Unpaid seller under sales of goods act 1872, is a person who has not been paid. He has
rights to resale the goods, stoppage of goods or keep them in his possession as well as he
also can take legal action against buyer because he has been awarded with these rights
by the law