Rights of an Unpaid Seller [Section 46-52,54-56,60-61]
The rights of an unpaid seller can broadly be classified under the following two categories:
The various rights of an unpaid seller have been shown in Fig.
I. Rights against the goods where the property in the goods has passed to the buyer
a) Right of Lien [Section 47,48 and 49]
Meaning of Right of Lein:
The right of lien means the right to retain the possession of the goods until the full price is received.
Three circumstance under which right of lien can be exercised[Section 47(1)]
Other provisions regarding right of lien[Sections 47(2),48,49(2)]
Circumstances under which right of lien in the following cases:
b) Right of Stoppage of Goods in Transit
The right of stoppage of goods means the right of stopping the goods while they are in transit,to regain possession and to retain them till the full price is paid.
Conditions under which right of stoppage in transit can be exercised[Section 50]
The unpaid seller can exercise the right of stoppage in transit only if the following conditions are fulfilled:
c) Right of Resale[Section 46(1) and 54]
An unpaid seller can resell the goods under the following three circumstance:
II. Rights against the goods where the property in the goods has not passed to the buyer
Right of withholding delivery[Section 46(2)]
Where the property in the goods has not been passed to the buyer, the unpaid seller, cannot exercise right of lien, but get a right of withholding the delivery of goods, similar to and co-extensive with lien and stoppage in transit where the property has passed to the buyer.
Rights of Unpaid Seller against the Buyer Personally
The unpaid seller, in addition to his rights against the goods as discussed above, has the following three rights of action against the buyer personally:
1. Suit for price (Sec. 55). Where property in goods has passed to the buyer; or where the sale price is payable ‘on a day certain’, although the property in goods has not passed; and the buyer wrongfully neglects or refuses to pay the price according to the terms of the contract, the seller is entitled to sue the buyer for price, irrespective of the delivery of goods. Where the goods have not been delivered, the seller would file a suit for price normally when the goods have been manufactured to some special order and thus are unsaleable otherwise.
2. Suit for damages for non-acceptance (Sec. 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. The seller’s remedy in this case is a suit for damages rather than an action for the full price of the goods.
3. Suit for Interest[Section 61(2)]
In case of breach of the contract on the part of seller,the buyer may sue the seller for interest from the date on which the payment was made.