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Rights of an Unpaid Seller - The Sale of Goods Act(1930) , Business Law Video Lecture | Business Law - B Com

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FAQs on Rights of an Unpaid Seller - The Sale of Goods Act(1930) , Business Law Video Lecture - Business Law - B Com

1. What are the rights of an unpaid seller under the Sale of Goods Act (1930)?
Ans. An unpaid seller is a seller who has not yet received the full payment for the goods sold. According to the Sale of Goods Act (1930), the rights of an unpaid seller include: - Right of lien: The unpaid seller has the right to retain the goods until the full payment is received. - Right of stoppage in transit: If the buyer becomes insolvent, the unpaid seller can stop the goods in transit and resume possession of them. - Right to resell: If the buyer defaults in payment, the unpaid seller can resell the goods and claim damages for any loss incurred. - Right to sue for the price: The unpaid seller can sue the buyer for the price of the goods, even if the property in the goods has not passed to the buyer. - Right to sue for damages: If the buyer wrongfully refuses to accept the goods or repudiates the contract, the unpaid seller can sue for damages.
2. How does the right of lien benefit an unpaid seller?
Ans. The right of lien allows an unpaid seller to retain possession of the goods until the full payment is received. This benefit serves as a form of security for the seller. By retaining the goods, the seller can prevent the buyer from using or disposing of them without paying. If the buyer fails to make the payment, the seller can exercise the right of lien and withhold the delivery of the goods until the payment is made. This right empowers the unpaid seller to protect their interests and encourage prompt payment.
3. What is the significance of the right of stoppage in transit for an unpaid seller?
Ans. The right of stoppage in transit is significant for an unpaid seller as it allows them to regain possession of the goods while they are in transit to the buyer. This right arises when the buyer becomes insolvent, meaning they are unable to pay their debts. In such a situation, the unpaid seller can exercise the right of stoppage in transit and halt the delivery of the goods. By doing so, the seller can protect their interests and prevent the goods from being delivered to an insolvent buyer. This right serves as a safeguard for the unpaid seller against potential financial losses.
4. Can an unpaid seller resell the goods if the buyer defaults in payment?
Ans. Yes, an unpaid seller has the right to resell the goods if the buyer defaults in payment. In such a case, the unpaid seller can treat the contract as repudiated and resell the goods to recover their losses. However, certain conditions need to be met for the resale to be valid. The unpaid seller must give notice to the buyer of their intention to resell, and the resale must be conducted in a reasonable manner. Any loss incurred due to the resale, such as a difference in price, can be claimed as damages from the defaulting buyer. This right allows the unpaid seller to mitigate their losses and recover the outstanding payment.
5. Can an unpaid seller sue the buyer for damages if the buyer refuses to accept the goods?
Ans. Yes, an unpaid seller can sue the buyer for damages if the buyer wrongfully refuses to accept the goods. If the buyer rejects the goods without any valid reason or fails to accept them as per the terms of the contract, it amounts to a breach of contract. In such a situation, the unpaid seller can claim damages from the buyer for the losses suffered due to the buyer's refusal. The damages may include any additional expenses incurred by the seller, such as storage costs or transportation charges. This right ensures that the unpaid seller is compensated for the losses caused by the buyer's wrongful refusal to accept the goods.
33 videos|59 docs|18 tests
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