19074 -Rights of Unpaid Seller
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Transcript of 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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