SOGA UNIT 4 Flashcards
When does a seller become an unpaid seller?
When the whole price of the goods has not been paid or tendered or when a bill of exchange was received as conditional payment and was dishonored.
Right of unpaid seller
In case of non-payment of price by the buyer, the unpaid seller has the following rights:
1. Right to stoppage in transit in case of insolvency of buyer and after seller is no longer in possession of goods
2. Right of lien when he has possession of goods
3. Right to resale
Sellers lien
The unpaid seller has the right to withhold delivery of the goods until the price has been paid or tendered. The unpaid seller has a right of lien over the goods whilst they are still in his possession until the price of the goods is paid or tendered.
Seller’s lien is _________ lien
possessory lien - can only be exercised if the goods are still in sellers possession
When can seller’s lien be exercised?
Seller’s lien can be exercised in the following cases
1. Where goods were sold without any stipulation of credit
2. Where credit term has expired
3. Where buyer has become insolvent
What if goods were partly delivered by unpaid seller?
If an unpaid seller has partly delivered goods to the buyer, he may exercise his right over the remaining goods unless the part delivery was made to show waiver of lien
Who is an insolvent person
A person who is not able to pay his dents in the ordinary course of business or cannot pay his dets as they become due
Termination of lien
mnemonic
WEDP
W-Waiver of right of lien
E-By Estoppel
D-Goods were delivered to carrier for purpose of transmission to buyer without reserving the right to disposal
P-Buyer lawfully obtains possession of goods
Exception to termination of lien
Seller does not lose his right of lien if he has obtained decree for price of goods
Meaning of Right of Stoppage in Transit
If the seller has parted with possession of goods i.e. he has sent the goods to the carrier for purpose of transmission to buyer and the buyer becomes insolvent then the seller has the right to regain possession of goods by stopping transit.
What is the duration of transit
Goods delivered to carrier for purpose of transmission to buyer till goods are received by buyer or his agent
What is interception by buyer?
Where buyer obtains the goods before they are at their destination with or without consent of seller. Transit comes to an end
Seller can exercise his right to stoppage in transit how?
Who bears expenses of re-delivery?
By taking possession of goods or giving notice to carrier or his principal of his claim. Notice to principal at a time when he will be able to communicate to the carrier.
Expenses of re-delivery borne by seller
Distinction between right of lien and stoppage in transit (3)
- Insolvent buyer
- possession
- Right of stoppage starts when lien ends
Situations where both rights are defeated
- Seller has assented to the sub-sale or pledge of goods by buyer.
- Where the seller transfers the document of title to the buyer who sends it to another buyer
-due to sale, then the rights are defeated
-due to pledge then the rights can be exercised with respect to rights of pledgee
What happens when the seller informs the buyer of his intention to resell the goods
In case the seller has given a notice of his intention to resell the goods, the buyer must, within reasonable time, pay the price of the goods. If he doesn’t then the seller can resell the goods.
Seller entitled to diff between contract price and market price as damages or gets to keep surplus.
(ONLY IF HE HAS GIVEN NOTICE OF HIS INTENTION TO RESELL)
Mnemonic for situations where goods can be resold
A-Agreement to sell
R-already exercised right of lien and stoppage in transit
I-Intention to resell notice
P-Goods are perishable
E-Expressly stated that the seller has reserved his right to resell.
ARIPE
Right of seller against the buyer
Suit for price: in both agreement to sell and contract to sell
Damages for non-acceptance: and wrongfully neglecting goods
Suit for interest: if specific agreement then from date when payment is due
if no specific agreement then from date when seller informs buyer
Repudiation of contract before due date: damages for anticipatory breach
Breaches and Rights of buyer against seller
- Non delivery of goods
Suit for specific performance
Damages for non-delivery - Goods do not conform with description
Damages for breach of warranty - Repudiation of contract
Damages for anticipatory breach
Suit for interest
Suit for specific performance elaborate
Where the seller has failed or refused to deliver the goods then the buyer may appeal for specific performance of the contract. The goods must be specific goods.
Suit for interest by buyer
The court may award interest on price at any rate he thinks is fit for refund of price.
What do you mean by auction sale
Auction Sale is a mode of selling where bids are invited publicly and the property is sold to the highest bidder
Legal position of auctioneer
Agent of seller not owner
Seller has not notified (Auction)
In case the seller has not notified his right to bid then he or any other person on his behalf must NOT bid at the auction.
The auctioneer must not knowingly accept the bid of such person.
voidable at option of buyer.
