1. UNPAID SELLERUNPAID SELLER
AND HIS RIGHTS
Priya Khade P1022
Charusheela Khandale P1024
Kinnar Majithia P1026
Saloni Marphatia P1028
Arjun Mishra P1030

2. Who is an Unpaid Seller?Who is an Unpaid Seller?
Seller who has not been paid (either in
the whole or partial)
One who has received payment in the
form of bill of exchange or other
negotiable instrument which has been
dishonored

3. Rights of an Unpaid SellerRights of an Unpaid Seller
When property of goods passed to buyer
 Right of Lien
 Right of Stoppage in Transit
 Right of Resale
When property of goods not passed to
buyer
Right of Withholding Delivery
Other Rights

4. Overview of rights of Unpaid SellerOverview of rights of Unpaid Seller

5. RIGHT OF LIENRIGHT OF LIEN
 Possession is essential to create right of lien
 Lien is of two kinds:
1. General Lien
2. Particular/Specific Lien

6. Right of Lien of Unpaid Seller –Sec. 47Right of Lien of Unpaid Seller –Sec. 47
• Applicability:
 Goods sold without any
stipulation as to credit
 Goods sold on credit,
credit-term expires
 Buyer becomes
insolvent, seller
possesses goods

7. Sec. 48 - Part Delivery of GoodsSec. 48 - Part Delivery of Goods
Right of lien applicable
to undelivered goods
unless agreement to
waive lien has been
made
“Delivery of the part
does not constitute the
delivery of the whole”

8. Sec. 49 – Termination of LienSec. 49 – Termination of Lien
1. Seller delivers goods to
carrier/bailee for
transmission to buyer
without reserving right
of disposal of goods.
2. Buyer lawfully obtains
possession of goods.
3. Seller waives his right of
lien.

9. Right of Stoppage in Transit-SectionRight of Stoppage in Transit-Section
5050
Essentials
 Seller must be partially/wholly unpaid
 Buyer must have become insolvent
 Goods must be in transit
Eg: Seller has parted with possession of goods
and buyer has not received the goods

10. Section 51Section 51
Duration of TransitDuration of Transit
• Transit ends when:
 Buyer takes delivery of goods
 Buyer/his agent takes deliver of goods
before
appointed destination i.e. in anticipation
 Carrier/bailee at appointed destination
acknowledges possession of goods
 Carrier/bailee wrongfully refuses to deliver
goods to buyer/his agent

11. Buyer refuses the goods:Buyer refuses the goods:
 If buyer refuses goods-transit does NOT come to
an end, even if seller refuses to take them back.
 Goods continues to be in possession of bailee
Section 52: How Right of Stoppage in transit isSection 52: How Right of Stoppage in transit is
effected by the seller:effected by the seller:
 Taking actual possession of goods
 Giving notice of his claim to carrier/bailee
who possesses goods or to redirect goods
to seller or according to his directions
Sale generally not rescinded by lien orSale generally not rescinded by lien or
stoppage in transitstoppage in transit

12. Right of stoppage in transit is lost wheRight of stoppage in transit is lost when:
 Buyer/his agent obtains delivery of
goods from carrier/bailee
 After arrival of goods at appointed
destination, carrier/bailee acknowledges
to buyer that he holds goods on his behalf
 Carrier/bailee wrongfully refuses to
deliver
goods to buyer/his agent

13. Right of Resale of unpaid sellerRight of Resale of unpaid seller
-Section 54-Section 54
• Unpaid seller can resale his goods after
executing his Right of Lien on retaining his
goods or after exercising his Right to
Stoppage in Transit upon insolvency of the
buyer under some circumstances.

14. Circumstances for Resale:Circumstances for Resale:
 Where goods are perishable
 Where seller gives notice to buyer of
his intention to resell and buyer does
not pay the price within a reasonable
time after the notice
 Where seller has expressly reserved
his right of resale in case of default

15. If the seller has given notice to the buyer:If the seller has given notice to the buyer:
 He can hold the buyer responsible for
loss suffered due to breach of contract.
 Profits earned on resale are retained by
the unpaid seller.

16. If notice has not been given to the buyer:If notice has not been given to the buyer:
 Seller cannot recover damages from
buyer.
 Seller has to pay the profits if any to the
buyer.
Seller can claim difference between the
contract price and the market price at
the date of the breach.

17. •If property in goods has not passed to buyer,
seller has the Right to Withhold Delivery.
Section 25-Reservation of Right of DisposalSection 25-Reservation of Right of Disposal
This is retained by seller when the seller
imposes certain conditions and until conditions
are fulfilled.

18. Sec. 55 & 56 – Other RightsSec. 55 & 56 – Other Rights
 Sue the buyer for price of goods
 Seller may sue buyer for damages for
wrongfully neglecting/refusing to
accept the goods
 Recover interest from buyer where
there is a specific agreement to that
effect. If there is no agreement, seller
may charge interest on price when
it becomes due.

19. Effect of Sub-Sale or Pledge byEffect of Sub-Sale or Pledge by
buyer-Section 53buyer-Section 53
In case of transfer of goods by buyer, the
unpaid seller’s right of lien or stoppage in
transit can be exercised subject to rights
of transferee. When pledgee sells goods,
the unpaid seller is entitled to receive the
surplus sale proceeds.

20. THANK YOU