Unpaid Seller & His Rights
Unpaid Seller as defined under Sale of Goods Act, 1930, is a person: –
- To whom the whole price has not been paid or tendered.
- And where a bill of exchange or other negotiable instruments has been accepted by him as a condition on which it was received has not been fulfilled by reason of dishonor of the instrument or otherwise.
Rights of an Unpaid Seller
Section 45 to 55 read about the rights of Unpaid Seller. Those rights can be classified into two groups. They are as follows.
- Rights against Goods
- Rights against Buyer
Rights of Unpaid Seller against Goods
Right of lien
Right to retain goods by unpaid seller till amount is recovered is called right of lien. If unpaid seller wants to exercise right of lien, he has to fulfill the following conditions.
- Unpaid seller shall have a right to retain possession of goods until buyer pays the price.
- Right only for price and not any other charges
- It is a possessory lien i.e. seller must have original possession of goods
- In case goods have been delivered in part, unpaid seller can exercise lien on remaining goods.
- If price is paid in part, lien can be exercised on entire quantity (General lien).
Right of stoppage in transit
Unpaid Seller has right to stop the goods in the transit itself. To exercise this right, the following conditions are to be fulfilled.
- Seller must be partially/wholly unpaid
- Buyer must have become insolvent
- Goods must be in the course of transit
Right to re-sale
Unpaid seller when has either exercised lien or has regained the possession of goods in transit can then exercise the right to re-sale when the following conditions are satisfied:
- Where goods are perishable
- Where seller gives notice to buyer of his intention to resell and buyer does not pay the price within a reasonable time after the notice
- Where seller has expressly reserved his right of resale in case of default
Rights of Unpaid Seller against Buyer
Right to sue for price
It is fundamental right of buyer to file a suit for recovery of unpaid price. In the case of sale, suit will be made for price balance, but not for compensation.
Right to sue to interest
If the buyer makes unreasonable delay for making payment, the seller has right to claim interest also.
Right to sue for Damages
If buyer refuses to accept and pay for the goods, the seller has the right to sue him for damages non-acceptance. He can recover only damages and not full price.