PPT - Unpaid Seller, Sale of Goods Act - 1930 CA Foundation Notes | EduRev

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CA Foundation : PPT - Unpaid Seller, Sale of Goods Act - 1930 CA Foundation Notes | EduRev

 Page 1


The Sale of Goods Act,1930 
Unit IV 
Unpaid Seller 
By: 
Dr. Anju Gupta 
Page 2


The Sale of Goods Act,1930 
Unit IV 
Unpaid Seller 
By: 
Dr. Anju Gupta 
LEARNING  OBJECTIVES 
?   Understand the concept of Unpaid Seller 
 
?   Know the rights of Unpaid Seller 
 
?   Analyze the effect of sub-sale or pledge by the buyer 
 
?   Distinguish the right of lien and right of stoppage in transit 
 
?   Know the rights of parties in case of breach of contract 
 
?   Understand the concept of sale by auction. 
Page 3


The Sale of Goods Act,1930 
Unit IV 
Unpaid Seller 
By: 
Dr. Anju Gupta 
LEARNING  OBJECTIVES 
?   Understand the concept of Unpaid Seller 
 
?   Know the rights of Unpaid Seller 
 
?   Analyze the effect of sub-sale or pledge by the buyer 
 
?   Distinguish the right of lien and right of stoppage in transit 
 
?   Know the rights of parties in case of breach of contract 
 
?   Understand the concept of sale by auction. 
MEANING OF UNPAID SELLER 
A seller who has not received the full price of the goods sold is termed as unpaid 
seller.  
                                                                                                                                                                
The seller of goods is deemed to be an ‘Unpaid Seller’ when- 
Examples: (1) X sold certain goods to Y for ‘ 5,000.Y paid  ` 4,000 but fails to pay the 
balance. X is an unpaid seller. 
 
(A) THE WHOLE OF THE PRICE HAS NOT BEEN PAID, OR  
(B) TENDERED, OR  
(C) A BILL OF EXCHANGE OR OTHER NEGOTIABLE INSTRUMENT WAS 
GIVEN AS P AYMENT, BUT THE SAME HAS BEEN DISHONOURED 
?   According to Section 45(a) of the Sale of Goods Act, 1930 
Page 4


The Sale of Goods Act,1930 
Unit IV 
Unpaid Seller 
By: 
Dr. Anju Gupta 
LEARNING  OBJECTIVES 
?   Understand the concept of Unpaid Seller 
 
?   Know the rights of Unpaid Seller 
 
?   Analyze the effect of sub-sale or pledge by the buyer 
 
?   Distinguish the right of lien and right of stoppage in transit 
 
?   Know the rights of parties in case of breach of contract 
 
?   Understand the concept of sale by auction. 
MEANING OF UNPAID SELLER 
A seller who has not received the full price of the goods sold is termed as unpaid 
seller.  
                                                                                                                                                                
The seller of goods is deemed to be an ‘Unpaid Seller’ when- 
Examples: (1) X sold certain goods to Y for ‘ 5,000.Y paid  ` 4,000 but fails to pay the 
balance. X is an unpaid seller. 
 
(A) THE WHOLE OF THE PRICE HAS NOT BEEN PAID, OR  
(B) TENDERED, OR  
(C) A BILL OF EXCHANGE OR OTHER NEGOTIABLE INSTRUMENT WAS 
GIVEN AS P AYMENT, BUT THE SAME HAS BEEN DISHONOURED 
?   According to Section 45(a) of the Sale of Goods Act, 1930 
EXAMPLES: 
? X sells goods of Rs. 5,00,000 to Y on a credit of 
one month, but after expiry of one month he 
did not pay the price, here X is said to be unpaid 
seller. 
? X sells goods of Rs. 5,00,000 to Y and Y issued a 
cheque for payment, but  it is dishonored, here 
X is said to be unpaid seller. 
? X sells goods of Rs. 5,00,000 to Y on a credit of 
one month, but after expiry of one month he 
has paid only 1,00,000 the price, here X is said 
to be unpaid seller. 
 
Page 5


The Sale of Goods Act,1930 
Unit IV 
Unpaid Seller 
By: 
Dr. Anju Gupta 
LEARNING  OBJECTIVES 
?   Understand the concept of Unpaid Seller 
 
?   Know the rights of Unpaid Seller 
 
?   Analyze the effect of sub-sale or pledge by the buyer 
 
?   Distinguish the right of lien and right of stoppage in transit 
 
?   Know the rights of parties in case of breach of contract 
 
?   Understand the concept of sale by auction. 
MEANING OF UNPAID SELLER 
A seller who has not received the full price of the goods sold is termed as unpaid 
seller.  
                                                                                                                                                                
The seller of goods is deemed to be an ‘Unpaid Seller’ when- 
Examples: (1) X sold certain goods to Y for ‘ 5,000.Y paid  ` 4,000 but fails to pay the 
balance. X is an unpaid seller. 
 
(A) THE WHOLE OF THE PRICE HAS NOT BEEN PAID, OR  
(B) TENDERED, OR  
(C) A BILL OF EXCHANGE OR OTHER NEGOTIABLE INSTRUMENT WAS 
GIVEN AS P AYMENT, BUT THE SAME HAS BEEN DISHONOURED 
?   According to Section 45(a) of the Sale of Goods Act, 1930 
EXAMPLES: 
? X sells goods of Rs. 5,00,000 to Y on a credit of 
one month, but after expiry of one month he 
did not pay the price, here X is said to be unpaid 
seller. 
? X sells goods of Rs. 5,00,000 to Y and Y issued a 
cheque for payment, but  it is dishonored, here 
X is said to be unpaid seller. 
? X sells goods of Rs. 5,00,000 to Y on a credit of 
one month, but after expiry of one month he 
has paid only 1,00,000 the price, here X is said 
to be unpaid seller. 
 
Thus, a seller is said to be unpaid seller when following 
conditions satisfied : 
 
a) The goods have been sold  
b) The price of goods sold is due 
c) The price has not yet been paid or tendered  
d) A negotiable instrument has been received as payment 
but has dishonored. 
 
NOTE: 
 
?  A seller is termed as unpaid seller even if a part  
 payment of price remains unpaid. 
?  However, the seller cannot be termed as unpaid for 
 non-payment of expenses 
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