Q. Who is an unpaid seller? Discuss his rights. [2022 - 20 marks - BA LLB)
Q. Discuss the rights of an unpaid seller under Indian Sale of Goods Act. [2021 - 20 marks - BA LLB]
Unpaid Seller
According to section 2(f) of the Indian Contract Act, every contract of sale of goods is a reciprocal promise where the seller is under the obligation of delivering the goods and the buyer is under the obligation to pay the agreed amount in return.
In the cases where the seller has not been paid for the goods or been paid partially is called an unpaid seller. According to section 45 of Sale of goods act An unpaid seller is one who has been given a negotiable instrument like a bill of exchange that has been dishonoured.
Rights of an Unpaid Seller
An unpaid seller has rights against buyer and the goods.
Rights against Buyer
(a) Suite for Price
Sue the buyer under Section 55(1) of the Sale of Goods Act, if the agreed amount is not paid fully or partially.
Under section 55(2) if the agreed due date of payment is passed and not paid.
(b) Suite for damage
If the buyer can be sued under section 56 if he wrongfully refuses to accept the goods.
(c) Suite for Interest
Section 61 provides that if there is a specific agreement to pay interest in case of late payment, the seller can sue the buyer for accrued interest thereupon.
(d) Repudiation of the contract before the due date
According to Section 60, the rule of anticipatory breach contract applies, wherein, if buyer repudiates the contract before the date of delivery the seller can consider the contract as rescinded and can sue for damages of the breach. .
Rights Against Goods
(a) Lien
Lien is a right which seller of goods can exercise when a buyer has not paid the price of goods, under this right seller can retain the possession of goods as an agent or bailee for the buyer. The seller can retain his possession as per Section 47 under the following circumstances:
(i) In case the buyer is insolvent.
(ii) When the term of goods sold on credit is expired.
(iii) Goods sold without any stipulation as to credit.
(b) Stoppage
When the goods have been transferred to carrier or bailee for the purpose of transmission to the buyer, who has become insolvent, the seller has the right to stop the goods in transit in order to protect himself against the loss that may arise due to insolvency. As per Section 50, there are four essential requirements for stopping the goods in transit:
(i) Unpaid seller.
(ii) Buyer insolvent.
(iii) Property should have passed to the buyer.
(vi) Property should be in course of transit.
Case Reference
In the case of Bird v. Brown, the court discussed as to when it is wrongful to refuse the delivery of goods. In this case, the goods arrived at the destination but the buyer has become insolvent. A merchant was acting for the seller who gave stop notice to the buyer without authority.
No comments:
Post a Comment