19074 -rights of unpaid seller

8/6/2019 19074 -Rights of Unpaid Seller

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RIGHTS OF UNPAID SELLER

PRESENTED BY:

T.DIVYA SREE

19074

TPS B

SSIM


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Rights of an Unpaid Seller

Rights Against Goods

Rights Against The Buyer Personally


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Rights Against Goods

Where the property in the goods has passed

[Sec 46(1)]

Righ

to

f Lien Right of stoppage the goods in transit.

Right of re-sale

Where the property in the goods has not passed

[Sec 46 (2)] Withholding delivery

Stoppage in transit


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Right of Lien

The word lien means to retain possession of.

Under sec 47 an unpaid seller who is in possession ofgoods, but ownership has been transferred to the buyer,

is entitled to retain them in his possession untilpayment or tender of the price, as in the followingcases:-

1. Where the goods have been sold without anystipulation as to credit.

2. Where the goods have sold on credit, but the term ofcredit has expired.

3. Where the buyer become insolvent.


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Rules Regarding Lien

The seller may exercise his right of lien not withstanding thathe is in the possession of goods as agent or bailee for thebuyer. If he loses the possession of the goods, he loses the

lien also.

The lien depends upon the actual possession and not on title.

The possession of goods by the seller must not expresslyexclude the right of lien.

The lien can be exercised by t

he seller

only f

or t

he price andnot for any other charges such as warehouse or dock charges.

Where an unpaid seller has made part delivery of the goods,he may exercise his right of lien on the remainder.


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Termination of Lien

According to section 49 , the lien of an unpaid sellerterminates in following conditions:

When seller delivers the goods to a carrier or other baileefor the purpose of transmission to the buyer, withoutreserving a right of disposal of the goods to himself.

Where the buyer or his agent lawfully obtains possession ofgoods.

EXAMPLE:

P sells a lawn-mower to D and refuses to deliver it to D till hehas been paid for. But he lends it to D in order that D maycut the grass. P does not lose his lien

By waiving the rights of lien


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Rights of Stoppage-in-Transit

Acc to sec 50 the right of stoppage in transit is a

right of stopping the goods in transit after the unpaid

seller has parted with the possession of the goods.

He has the further right of resuming the possession of

goods as long as they are in course of transit, and

retaining possession until payment or tender of the

price. It is available to the unpaid seller - when the buyer of goods becomes insolvent,

when the goods are in transit


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Duration of Transit [sec 51]

According to Section 51,when the seller hasdelivered the goods to the carrier or bailee fortransmission to the buyer, until the goods are

received by the buyer or his agent is the duration oftransit.

The carrier may hold goods

As sellers agent As buyers agent

In an independent capacity


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When does transit end ?

Once the goods reach the hands of the buyer,servant or agent.

Als

o, i f t

he buyer

or agent

obtains delivery

ofgoods before they reach their destination.

Holding the goods by the carrier or bailee on

behalfof the buyer

Rejection by the buyer

Delivery to ship


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Comparison

Right of lien

It can be exercised even whenthe buyer is able to pay but

does not pay. It can be exercised on goods

which are in actual orconstructive possession of theseller.

The right comes to an endwhen the possession of thegoods is surrendered by theseller.

Right of stoppage in transit

The right arises when the buyeris insolvent.

It can be executed when thegoods are in the possession ofthe middlemen.

The right of transitcommences when the goods

have left the possession of theseller and continue until thebuyer or his agent has acquiredthe possession.


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Contd..

Right of lien

The right of lien is to retain

the possession.

Right of stoppage in transit

the right of stoppage in transit

is to regain or resume

possession.

EXAMPLE:B sells and consigns certain goods to A. B being still unpaid,

A becomes insolvent and while the goods are in transit,assigns the bill of lading for cash to C who knows that A isinsolvent. The assignment not made in good faith. B maystop the goods in transit.


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Right of Re-Sale [sec 54]

The unpaid seller, who has retained possession ofthe goods in exercise of his right of lien or who has

resumed possession from the carrier upon

insolvency of the buyer, can re-sale the goods:

If the goods are of perishable nature, without any noticeto the buyer.

In the other cases after notice to buyer calling upon himto pay or tender the price within reasonable time, andupon failure of the buyer to do so.


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Right against the buyer personally

[sec 55 to 61] Suit for the price [sec 55]

Where the property has passed

Where property has not passed

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 forthe non- acceptance.


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Contd..

Repudiation of contract before due date [sec 60]

Where the buyer repudiates the contract before the date ofdelivery, the seller may either

Treat the contract as subsisting and wait till the date of

delivery

He may treat the contract as rescinded and sue for damages

for the breach. This rule is known a s the ru l e f or

anticipatory breach of contract.


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Contd..

Suit for Interest [sec 61]

Where there is a specific agreement between the sellerand the buyer as to interest on the price of the goods

from the date on which payment becomes due, the sellermay recover interest from the buyer.

If there is no specific agreement , the seller may chargeinterest on the price when it becomes due from such day

as he may notify the buyer. In the absence of the contract the court may award

interest to the seller in a suit by him.


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Remedies Of Breach OfContract Of Sale

Sellers Suits

Suit for price (Sec 55)

Suit f

or damage f

or n

on-acceptance

of t

he g

oods (Sec56)

Suit for damages for repudiation of contract by thebuyer before due date (Sec 60)

Suit for interest [Sec 61(2)(a)]


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Contd..

Buyers suits

Suit for damages for non-delivery of the goods (Sec 57)

Suit f

or specific perf

ormance (Sec 58)

Suit for breachof warranty (Sec 59)

Suit for damage for repudiation of contract by the sellerbefore due date (Sec 60)

Suit for interest [Sec 61(1)(b)]


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19074 -rights of unpaid seller

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