U4: Unpaid Seller Flashcards
Unpaid Seller
45(1), the seller of the goods deemed to be an ‘unpaid Seller’ when-
(a) The whole of the price has not been paid or tendered and the seller had an immediate right of action for the price.
(b) When a Bill of exchange or other negotiable instrument has been received has not by fulfilled by reason of the dishonour of the instrument or otherwise.
Rights of an Unpaid Seller
Unpaid seller’s right (Section 46): Subject to the provisions of this Act and of any law for the time being in force, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law-
(1) a lien on the goods for the price while he is in possession of them,
(b) in case of the insolvency of the buyer a right of stopping the goods in transit after he has parted with the possession of them;!
(c) a right of re-sale as limited by this Act. [Sub-section (1)]
Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies,
a right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transit where the property has passed to the buyer [Sub-section (2)]
Seller’s lien
Seller’s lien (Section 47): According to sub-section (1), subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or
tender of the price in the following cases, namely:-
(a) where the goods have been sold without any stipulation as to credit;
(b) where the goods have been sold on credit, but the term of credit has expired;
(c) where the buyer becomes insolvent.
According to sub-section (2), the seller may exercise his right of lien notwithstanding that he in possession of the goods as agent or ballee for the buyer.
Part Delivery
Part delivery (Section 48): Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on the remainder, unless such part delivery has been made under such circumstances as to show an agreement to waive the lien.
Termination of lien
Termination of lien (Section 49): According to sub-section (1), the unpaid seller of goods loses his len thereon-
(a) when he delivers the goods to a carrier or other ballee for the purpose of transmission to the buyer without reserving the right of disposal of the goods,
(b) when the buyer or his agent lawfully obtains possession of the goods,
(c) by waiver thereof.
(d) By Estoppel i.e., where the seller so conducts himself that he leads the third parties to believe that the lien does not exist.
The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that he has obtained a decree for the price of the goods. [Sub-section (2)]
Right of stoppage in transit
The right of stoppage in transit means the right of stopping the goods while they are in transit, to regain the possession and to retain them till the full price is paid.)
However, the right of stoppage in transit is exercised only when the following conditions are fulfilled:
(a) The seller must be unpaid.
(b) He must have parted with the possession of goods.
(c) The goods are in transit
(d) The buyer has become insolvent.
(e) The right is subject to provisions of the Act. [Section 50]
Duration of Transit
Duration of transit (Section 51):
(1) Goods are deemed to be in the course of transit from the time when they are delivered to a carrier or other ballee for the purpose of transmission to the buyer, until the buyer or his agent in that behalf takes delivery of them from such carrier or other bailee.
(2) If the goods are rejected by the buyer and the carrier or other bailee continues in possession of them, the transit is not deemed to be at an end, even if the seller has refused to receive them back
(3)When goods are delivered to a ship chartered by the buyer, it is a question depending on the circumstances of the particular case, whether they are in the possession of the master as a carrier or as agent of the buyer.
(4) Where part delivery of the goods has been made to the buyer or his agent in that behalf, the remainder of the goods may be stopped in transit, unless such part delivery has been given in such circumstances as to show an agreement to give up possession of the whole of the goods.
When does transit come to end?
The right of stoppage in transit is lost when transit comes to an end. Transit comes to an end in the following case:
- When the buyer or other bailee obtains delivery.
- Buyer obtains delivery before the arrival of goods at destination. It is also called interception by the buyer which can be with or without the consent of the carrier.
- Where the carrier or other bailee acknowledges to the buyer or his agent that he holds the goods as soon as the goods are loaded on the ship, unless the seller has reserved the right of disposal of the goods.
- If the carrier wrongfully refuses to deliver the goods to the buyer
- Where goods are delivered to the carrier hired by the buyer, the transit comes to an end.
- Where the part delivery of the goods has been made to the buyer, the transit will come to an end for the remaining goods which are yet in the course of transmission.
- Where the goods are delivered to a ship chartered by the buyer, the transit comes to an end. [section 51]
How stoppage in transit is effected:
There are two modes of stoppage in transit-
- By taking actual possession of goods.
- By giving notice to the carrier not to deliver the goods.
Distinction between right of lien and stoppage in Transit
- Retain vs. Regain
- Possession
- Insolvency
- Begining and End
- When comes to end
Auction Sales
Section 64
- An auction sale is selling property by inviting bids publicly and the property is sold to the highest bidder.
- An auctioneer is an agent governed by law of agency.
- When he sells, he only agent of the seller.
- He may, however sells his own property as the principal and need not to disclose the fact he is so selling.
- Legal rules of Auction Sales
1. Where goods are sold in lots.
2. Completion of contract of sale.
3. Right to bid may be reserved.
4. Where the sale is not notified by the seller.
5. Reserved Price.
6. Pretended bidding.
