UNPAID SELLER

SUBMITTED BY:
B.Naveen Swaroop -01
V.Sampath -06
A.Chaitanya Reddy -31
P.Naga Malleshwari-32
Joel Raj -34
 SALE OF GOOD ACT
According to section 4,A contract of sale of
goods is a contract where by the seller transfer
or agrees to transfer the property in goods to the
buyer for price
 UNPAID SELLER
The term ‘unpaid seller’ may be
defined as the seller to whom the full
price of the goods sold has not been
paid.
 THE LEGAL DEFINITION OF ‘UNPAID
SELLER’ IS GIVEN IN SECTION 45(1) OF
THE SALE OF GOODS ACT, AS UNDER:

“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 and
the condition on which it was received has not been
fulfilled by reason of the dishonour of the instrument or
otherwise.”
 RIGHTS AND REMEDIES OF AN
UNPAID SELLER

Where the ownership of the goods has transferred to

the buyer:
In this case, the unpaid seller has the following
rights:

(a) Right of lien.-SECTION 47

(b) Right of stoppage of goods in transit.-
SECTION 50
(c) Right of resale.- SECTION -54(2)
Right of lien.-SECTION 47
Th e Unpaid seller of goods who is in
possession of them is entitled to retain
his possession until payment or tender
of the price is made
 Right of stoppage in Transit
(Section 50)

 This right is contained in sec-50 of sale of goods

act, which provides that the buyer becomes
insolvent , and the unpaid seller has parted
with the possession of the goods, he can stop
the goods in transit until the price is paid or
tendered to him
 Right of resale [SECTION -54(2)]

 The unpaid seller can exercise the right to resell

the goods under the following conditions:
 When the goods are of a perishable nature. In
such a case the buyer need not be informed of
the intention of re-sale
 Where he gives notice to the buyer of his
intention to re-sell the goods and the buyer
does not within a reasonable time pay or
tender the price
RIGHT AGAINST THE BUYER:
•Right to sue for the price
(Section 55)
•Right to sue for the damages

(Section 56)
•Repudiation of contract before

due date(Section 60)

•Suit for interest [section61(2)d]
 Right to sue for the price
(Section 55)

 Where the buyer fails to pay the

price of the goods in terms of the
contract,of the seller can file a suit
against the buyer for the recovery of
the price
 Right to sue for the damages
(Section 56)

 Where the buyer wrongfully neglects or

refuses to accept and pay for the goods
,the seller may sue him for damages for
non acceptance. As regards measure of
damages,section-73 of the Indian contract
Act,1872,applies
 Repudiation of contract before due
date(Section 60)
 Where the buyer repudiates the contract before
the date of delivery, the seller may treat the
contract as rescinded and sue damages for the
breach. This known as the ‘rule of anticipatory
breach contract’
 Suit for interest [section61(2)d]
 Where there is specific agreement between the
seller and the buyer as to interest on the price
of the goods from the date on which payment
becomes due, the seller may recover interest
from the buyer. If, however there is no specific
agreement to this effect, the seller may change
interest on the price when it becomes due such
day as he may notify to the buyer
 CASE REGARDING
UNPAID SELLER:
Varun had bought goods from Salim, and had agreed to pay
the price of the goods bought by him at a later date.
However ,Varun had left the goods to him (Varun) at a later
date. In the mean time , Varun had become insolvent , Under
these circumstances ,will Salim thse seller, Have the right to
exercise his lien on the goods unpaid for?