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Law- Unpaid Seller

By | November 2008
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Who is an Unpaid seller?

The seller of goods is deemed to be an "unpaid seller"

(a) When the whole of the price has not been paid or tendered. (b) When a bill of exchange or other negotiable instrument has been received as conditional payment, and the conditions on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise. The term seller includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of lading has been endorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price. A seller who has been partly paid is also considered as an unpaid seller for part unpaid.

Rights of an Unpaid Seller
Subject to the provision of this act the rights of an unpaid seller can be studied under two heads: 1. When the property in the goods has passed to the buyer: Section 46(1) lays down that 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- (a) a lien on the goods for the period 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.

2. When the property in the goods has not passed to the buyer: 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 Rights of Lien

Right of lien means ‘right to retain’ the possession of the goods or property until the claim is paid or satisfied. Possession is essential to create right of lien. It must be rightful and continuous. Lien is of two types:

• General lien: It means right to retain the goods until all...
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