In a transaction of sale it is not possible to avoid credit sales. In credit sales there is a risk of a debtor not paying the price of the goods even after the credit period is over. The seller of the goods therefore must possess some rights which he can use to secure payment of the price. If the recovery of the price is not possible due to the reason of bankruptcy of the buyer, he must have some other remedies. The Sale of Goods Act has made elaborate provisions regarding the rights of an unpaid seller. The term 'unpaid seller' may be defined as the seller to whom the full price of the goods sold has not been paid. The legal definition of 'unpaid seller' is given in Section 45 of the Sale of Goods Act, as under: "The seller of the 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 dishonor of the instrument or otherwise." Features of the unpaid seller
1. He must sell goods on the cash basis and must be unpaid. 2. If he sells on credit basis, he is not an unpaid seller during the period of credit. 3. The term of credit has expired and the price has not been paid to him. 4. He must be unpaid wholly or partially. If a part of price remains unpaid, he is unpaid. 5. When the price is paid in the form of negotiable instruments and it has been dishonored. 6. If buyer offers payment and seller refuses to accept, the seller is not an unpaid seller. 7. Party A sells a car on cash basis to party B and the price has not been received yet.. 8. A sells good to B on 5 months credit period and B turns insolvent after 2 months. 9. A sells TV set to B on the same day cheque basis, the cheque is dishonored due to insufficient. SALE OF GOODS ACT
Contract of Sale: Sale and agreement to sell
(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price. There may be a contract of sale between 1 part owner and another. (2) A contract of sale may be absolute or conditional.
(3) Where, under a contract of sale, the property in the goods is transferred from the seller to the buyer, the contract is called a sale: but, where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
Capacity to buy and sell-sale of necessaries to persons incompetent to contract Capacity to buy and sell is regulated by the general law concerning capacity contract and to transfer and acquire property: Provided that, where necessaries are sold and delivered to an infant or minor or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price therefor.
"Necessaries", in this section, means goods suitable to the condition in life of such infant or minor or other person and to his actual requirements at the time of the sale and delivery. Contract of sale, how made
Subject to the provisions of this Act and of any Act in that behalf, a contract of sale may be made in writing or by word of mouth or partly in writing and partly by word of mouth or may be implied from the conduct of the parties. Provided that nothing in this section shall affect the law relating to corporations. Sale and agreement to sell goods on credit in course of retail trade to be accompanied by invoice (1)A sale of goods on creditor an agreement to sell goods on credit in the course of trade shall not be enforceable by action at...