Rights of Unpaid Sellers Against the Goods

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2.0 RIGHTS OF UNPAID SELLER AGAINST THE GOODS
The operation of the seller’s right over the goods in the Act is dependent upon the being ‘unpaid’. Section 45, the seller of goods is deemed to be an “unpaid seller” within the meaning of this Act-

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 condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.

A seller for the purpose section 45 includes an agent of the seller, for example, an agent of the seller to whom the bill of lading is endorsed, a consignor, an agent who has himself paid, or an agent who is directly responsible for the price, define under section 45(2), 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 indorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price.

The normal remedy of an unpaid seller is to sue the buyer for the price or for damages for non-acceptance. According to section 55(1) Sale of Goods Act 1957, where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods. Section 55(2), where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract. Section 56, says that 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 Sales of Goods Act gives him additional remedies in respect of the goods themselves, thereby conferring on the seller a greater degree of security than is normally available. These remedies against the goods arise where the unpaid seller is possessed of three rights ‘by implication of law’ under section 46(1), which subject to 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. The rights of an unpaid seller against the good are:

i. A lien on the goods for the price while he is in possession of them: Section 46(1)(a), Sale of Goods Act 1957; ii. In the event of insolvency of the buyer, the right of stopping the goods in transit after he has parted with the possession of them: Section 46(1)(b), Sale of Goods Act 1957; iii. A right of resale: Section 46(1)(c), Sale of Goods Act 1957 iv. A right of withholding delivery: Section 46(2), Sale of Goods Act 1957

Right of lien
In respect of the sale of goods, the unpaid seller of goods who is in possession of them is entitled to retain possession until payment or tender of the price. Section 46(2) states that the seller may withhold delivery in addition to his other remedies where property in goods has not passed to the buyer. However, where property in the goods has passed to the buyer, the right of lien over the goods does not exist anymore. These rights arise in the following cases listed in Section 47(1). Subject to 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.

Section 47(2) defines that the seller may exercise his right of lien notwithstanding that he is in...
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