1

The Unpaid Seller

2

Who is an Unpaid Seller? 

S.38(1) defines an

unpaid seller…

 'The seller of goods is

an unpaid seller within

the meaning of this

Act…

3

Unpaid seller's rights

S.39(1) provides the unpaid seller of goods with 3 rights:A. A right of lien.B. A right of stoppage.C. A right of resale of the goods.

4

Unpaid seller's lien (S.41-43)

The seller's lien is a right to retain the goods until the whole of the price has been paid or tendered.

5

• Unpaid• No Credit Sale• Possession

6

Termination of Lien(Sec. 49)

Delivery to a carrier.Possession by the buyer.Seller waives his right of lien.

7

Case on Right of Lien

A Case in which X sells his car in an auction

to Y who is the highest bidder. Y pays by

cheque and is allowed to do so provided he

signs a document stating that the property

in the car would not pass to him until the

amount is credited to X’s a/c.

8

The property in the car had passed on the fall of the Hammer!!!

9

Unpaid seller's right of stoppage of goods in transit

S.44 states, 'when the buyer of goods becomes insolvent the unpaid seller who has parted with the possession of the goods has the right of stopping them in transit, that is to say, he may resume possession of the goods as long as they are in course of transit, and may retain them until payment or tender of the price.'

10

• When the buyer becomes insolvent.• When the goods are in

transit(Sec. 50)

11

DurationGoods are in transit when they have passed

out of the possession of the seller into the

possession of a carrier, but have not yet

reached the possession of the buyer.

12

Transit Comes to an end when…

• The buyer/agent obtains

delivery before the

appointed destination.

• When the carrier

acknowledges after the

arrival at the appointed

destination.

• Carrier wrongfully refuses

delivery.

13

Unpaid seller's right of resale

The unpaid seller can resell the goods when…

14

On a re-sale…I(On notice)

If there is a loss.

If there is a

surplus.

II(Without notice)

On loss.

On Surplus.

15

Right of with-holding DeliveryWhere the property in goods

has not passed to the buyer, an

unpaid seller has, in addition to

his other remedies. A right of

with-holding delivery similar to

and in co-existence with his

rights of lien and stoppage in

transit where the property has

passed to the buyer.

16