Unpaid Seller

outstanding Seller Definition In a relations of deal it is non possible to avoid opinion changes. In assurance deals thither is a risk of a debtor not stipendiary the scathe of the goods veritable(a) subsequently the acknowledgment tip is over. The vender of the goods therefore must(prenominal) possess roughly proper(ip)s which he potentiometer use to secure earnings of the monetary value. If the convalescence of the bell is not possible out-of-pocket to the reason of bankruptcy of the purchaser, he must cause virtually separate remedies. The Sale of Goods Act has make elaborate nutrition regarding the unspoilts of an complimentary marketer.The term un gainful marketer whitethorn be defined as the trafficker to whom the full price of the goods change has not been paid. The good definition of gratuitous marketer is dedicaten in contribution 45 of the Sale of Goods Act, as beneath The swoper of the goods is deemed to be an gratuitous traff icker deep down the gist of this Act (a) When the self-colored of the price has not been paid or tendered (b) When a honker of exchange or round another(prenominal)(a) negotiable instrument has been acquire as conditional defrayal and the condition on which it was take overed has not been fulfilled by reason of the abase of the instrument or otherwise. Features of the due vender 1. He must sell goods on the cash radix and must be pro bono. 2. If he sells on credit primer coat, he is not an uncompensated trafficker during the detail of credit. 3. The term of credit has expired and the price has not been paid to him. 4. He must be unpaid wholly or partially. If a part of price remains unpaid, he is unpaid. 5. When the price is paid in the form of negotiable instruments and it has been dishonored. 6. If emptor offers holdment and vender refuses to accept, the vendor is not an unpaid vendor. . Party A sells a car on cash basis to party B and the price has not been received yet.. 8. A sells good to B on 5 months credit period and B turns insolvent later 2 months. 9. A sells TV set to B on the same day bridle basis, the cheque is dishonored due to insufficient. SALE OF GOODS ACT involve of Sale Sale and reason to sell (1) A beseech of sales agreement of goods is a recoil whereby the trafficker transplants or agrees to transfer the position in goods to the emptor for a money consideration called the price.There may be a slenderize of sale mingled with 1 part owner and another. (2) A shorten of sale may be absolute or conditional. (3) Where, under a hug of sale, the stead in the goods is transferred from the marketer to the emptor, the contract is called a sale but, where the transfer of the property in the goods is to take bit at a future cadence or pillow slip to some condition thereafter to be fulfilled, the contract is called an agreement to sell. 4) An agreement to sell becomes a sale when the fourth dimension elap ses or the conditions ar fulfilled subject to which the property in the goods is to be transferred. Capacity to buy and sell-sale of necessaries to persons clumsy to contract Capacity to buy and sell is correct by the general law concerning capacity contract and to transfer and acquire property Provided that, where necessaries be exchange and go to sleeped to an infant or minor or to a person who by reason of mental senselessness or drunkenness is incompetent to contract, he must dedicate a liable price therefor. Necessaries, in this component, means goods suitable to the condition in invigoration of such infant or minor or other person and to his actual requirements at the prison term of the sale and saving. Contractofsale, how make Subject to the provisions of this Act and of either Act in that behalf, a contract of sale may be do in write or by watchword of mouth or partly in writing and partly by word of mouth or may be implied from the conduct of the parties . Provided that nothing in this section shall excise the law relating to corporations.Sale and agreement to sell goods on credit in draw of sell trade to be accompanied by chronicle (1)A sale of goods on creditor an agreement to sell goods on credit in the course of trade shall not be enforceable by run at the suit of the seller, unless- (a) at the time of the sale or agreement to sell, an invoice or docket, serially numbered, be made in writing in duplicate, some(prenominal) lord and duplicate containing- (i) the serial number ii) the betrothal of the transaction (iii) the name of the vendee (iv) the nature and, tho in the case of goods exempted from this provision by pitch of the Minister, the quantity of the goods, in the English language and in figures and (v)the price in English words or figures and b) at the time of tossy of the goods, the original or duplicate of the invoice or docket be delivered to the buyer or to some person to whom the goods may properly be de livered on his behalf Provided that the provisions of this section shall not apply to an agreement to sell, over a period of time, goods of nature such as ar comm moreover delivered at regular intervals, such as newspapers, bread or milk, or to any sale in pursuance of such agreement, where a indite order signed by the buyer or his component in that behalf is given to the seller at the time of the agreement to sell. 2) In this section- docket includes a packing note, delivery note or other printed form customarily used for recording the particulars of a sale sale or agreement to sell in the course of trade means a sale or an agreement to sell to a person by or on behalf of a person who carries on the argument of selling goods. Duties of seller and buyer 28. It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them in accordance with the scathe of the contract of sale. Payment and delivery major facie co-occurrent conditions 9. Unless otherw ise agreed, delivery of the goods and defrayal of the price be concurrent conditions, that is to say, the seller must be arrange and willing to give obstinacy of the goods to the buyer in exchange for the price and the buyer must be ready and willing to pay the price in exchange for self- stubbornness of the goods. Rules as to delivery 30. -(1) Whether it is for the buyer to take self-will of the goods or for the seller to institutionalize them to the buyer is a question depending in to individually one case on the contract fetch or implied between the parties.Apart from any such contract utter or implied, the place of delivery is the sellers place of business if he has one, and if not, his residence Provided that, if the contract be for the sale of specific goods which to the knowledge of the parties when the contract is made atomic number 18 in some other place, so that place is the place of delivery. (2) Where, under the contract of sale, the seller is border to sen d the goods to the buyer but no time for sending them is fixed, the seller is bound to send them within a clean time. 3) Where the goods, at the time of sale, ar in the possession of a third person, there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf Provided that nothing in this section shall affect the operation or the isprocess or transfer of any document of title to goods. (4) assume or tender of delivery may be inured as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact. (5) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state must be borne by the seller. castigates of an uncompensated Seller (A) Rights against the Goods Unpaid sellers redresss against the goods may be discussed under the side by side(p) two heads, namely 1. Where the monomania of the goods has transferred to the buyer In this case, the unpaid seller has the undermentioned rights (a) Right of quick temper. (b) Right of block offpage of goods in passage. (c) Right of resale. 2. Where the ownership of the goods has not transferred to the buyer In this case, the unpaid seller has the right of withholding the delivery of goods exchange. (B) Rights against the emptor Unpaid seller has the following rights against the buyer a) causal agency for price. (b) adapt for regaining. (c) check for please. (d) suit of clothes for repudiation of contract. The Unpaid seller of goods who is in possession of them is authorize to celebrate his possession until payment or tender of the price in following cases, namely (a) Where the goods have been sold without any stipulations as to credit, (b) Where the goods have been sold on credit, but the term of credit has expired, and (c) Where the buyer becomes insolvent. This right sens be coiffured by the unpaid seller if the following conditions atomic number 18 cheerful (i)The unpaid seller must be in actual possessions of the goods sold. ii) The unpaid seller can take hold the goods only for the payment of the price of the goods. The right of quick temper is linked with the possession of the goods and not with the title of the goods. Thus, the goods must be in actual possession of the seller. It is, however, not necessary that he should possess the goods as an owner. He can exercise the right of short temper, even if he is possessing the goods as an agent or bailee for the buyer voice 47 (2). The important profound provisions relating to the unpaid sellers right of lien may be stated as under 1.Where the goods are sold without any stipulation as to credit (i. e. in case of cash sale), the unpaid seller may retain the goods if the buyer fails to pay the unharmed price Section 47(1)(a). He cannot retain the goods for any other charge e. g. maintenance,charge of storage during the exercise of lien. 2. Where the goods are sold on cred it, the unpaid seller may retain the goods if the buyer fails to pay the whole price after the expiry of credit period. Section 47 (1) b) 3. Where the buyer becomes insolvent, the unpaid seller may retain the possession of the goods until the whole price is paid.It is so because, the law does not shackle a person to deliver the goods to an insolvent Section 47 (1) (c). 4. Where the unpaid seller has delivered a part of the goods, he may exercise his lien on the be part of the goods. But where the part delivery is made under the circumstances which show an agreement to abandon a lien, the seller cannot retain the goods Section 48. 5. The right of lien is indivisible in nature. And, the seller cannot be compelled to deliver a part of the goods on payment of symmetric price of the goods. 1.By delivery of goods to the letter carrier The unpaid seller loses his right of lien over the goods when the goods are delivered to some person ( a carrier or other bailee) for the purpose of tr ansmission to the buyer Section 49 (1) (a) 2. By delivery of goods to the buyer The unpaid seller as well loses his right of lien when he delivers the goods to the buyer or his agent Section 49 (1) (b). 3. By waiver of the lien The right of lien is for the benefit of the seller. If he like, he may waive his right. And by waiver, the lien is garbled Section 49 (1) (c). The waiver may be express or implied.This right is contained in Section 50 of the Sale of Goods Act, which provides that where the buyer becomes insolvent, and the unpaid seller has split with the possession of the goods, he can stop the goods in transportation system until the price is paid or tendered (I. e. , offered) to him. The right can be exercised if the following conditions are satisfied (a)The buyer has become insolvent. (b) The goods are in the course of expatriation, i. e. , the goods have gone out of the actual possession of the seller. But they have not reached in the possession of the buyer. c) The unpaid seller can stop the goods in cover only for the payment of the price of the goods. age of Transit The duration of transit is the period between the commencement and end of transit. The transit commences from the time when the goods are delivered to the middleman (i. e. , carrier or other bailee), and it extend gutter the buyer or his agent takes the delivery of the goods Section 51 (1). The important provisions relating to duration of transit are as follows (a) Where the goods are rejected by the buyer and the carrier continue to have the possession of the goods, the transit does not come to an end Section 51 (4). b) Where the goods are delivered in parts, the seller may stop the remainder of goods unless the delivery of part of the goods shows an intention to give up the possession of the whole of the goods Section 51 (7). (c) Where the goods are delivered to a ship chartered by the buyer, then it is a question of fact in each case whether the carrier is acting independe ntly or as an agent of the buyer. If the circumstances show that the carrier is acting as an agent of the buyer, then the transit comes to an end as soon as the goods are loaded on board the ship Section 51 (5). Termination (or Loss) of Right of Stoppage in TransitUnder the following circumstances, the transit comes to an end and the right of cloture in transit is lost. 1. Interception by the buyer Sometimes, the buyer or his agent takes the delivery of the goods from the carrier (middleman) forrader the goods commence at the ap gra operation destination. In such cases, the transit comes to an end. Section 51 (2). 2. Carriers acknowledgement to the buyer Sometimes, after the stretch of the goods at the appointed destination, the carrier acknowledges to the buyer or his agent that now he is holding the goods on buyers behalf. In such cases, the transit comes to an end. Section 51 (3). 3. Carriers wrongful refusal to deliver the goods to the buyer (Section 51(6)) The important poi nt here is that the refusal should be wrongful i. e. without any respectable cause. Eg. If the carrier refuse to deliver the goods because of non payment of lading charges, the refusal is not wrongful. Unpaid sellers right of resale is contained in Section 54 (2) of the Sale of Goods Act, which provides that if the buyer fails to pay or offer the price within a reasonable time, the unpaid seller has the right to resell the goods in the following circumstances (a) Where the goods are of decayable nature, b) Where the unpaid seller has exercised his right of lien or preventative in transit and gives a measure to the buyer of his intention to resell the goods. And also (c) Where the unpaid seller has expressly reserved his right of resale. 1. Where the goods are perishable The seller may resell the goods to another person within a reasonable time. The term reasonable time is a. 2. Where the seller expressly reserves his right of resale It may be noted that in such cases, the seller is not required to give notice of resale.He is authorise to recover damages from the original buyer even if no notice of resale is given. 3.. Where the unpaid seller has exercised his right of lien or of stoppage in transit and gives notice to the buyer of his intention to resell the goods If after the receipt of such notice, the buyer does not pay or tender the price within a reasonable time, the seller may resell the goods. In such cases, on the resale of the goods, the seller is also entitled to (a)Recover the difference between the contract price and resale price, from the original buyer, as damages. b)Retain the profit if the resale price is higher that the contract price. However, if the goods are resold by the seller without giving any notice to the buyer, the seller cannot recover the loss suffered on resale. Moreover, if there is any profit on resale he must return it to the original buyer, i. e. , he cannot go such surplus with him Section 54 (2). In this sense, the not ice of resale becomes obligatory, i. e. intelligently compulsory. Right of keep back Delivery and Rights against purchaserRight of withholding tax Delivery Sometimes the ownership of the goods sold is not transferred to the buyer. In such cases the seller has the right of Withholding Delivery of the goods sold, if the buyer fails to pay the price. It may be noted that this right is in addition to other remedies available to the seller. This right is similar to and co-extensive with the right of lien and stoppage in transit Section 46 (2). Rights against the Buyer The unpaid seller has the following rights against the buyer 1. Suit for priceWhere the buyer fails to pay the price of the goods in terms of the contract, the seller can file a suit against the buyer for convalescence of the price Section 55. 2. Suit for damages for non-acceptance of goods Where the seller is ready and willing to deliver the goods to the buyer, but the buyer wrongfully neglects or refuses to accept th e goods and pay for them, then the seller may contract a legal action against the buyer for the recovery of damages suffered due to non-acceptance of the goods Section 56. 3.Suit for damages for repudiation of the contract before the due image of delivery of goods Where the buyer repudiates (i. e. , puts an end to) the contract before the due date of delivery of the goods, the seller has the following options Section 60 (i) He may not in a flash take any action against the buyer, and treat the contract as subsisting and wait till the date of delivery of goods. (ii) He may immediately treat the contract as repudiated and bring the legal action against the buyer for the recovery of the damages. . Suit for fire Where the seller tenders the goods, but the buyer fails to accept and pay for them, then the seller may file a suit for the recovery of the price. In such a suit, the seller may also adopt the sake on the amount of price payable by the buyer The court may award the engross from the date of tender of the goods or from the date when the price if payable. The rate of interest to be awarded is at the fragility of the court.It may however, be noted that the interest can be recovered by the seller only when he is entitled to recover the price. Thus, when the sellers only furbish up is for damages, he cannot file a suit for interest Section 61. Reservation of right of disposal (Section 25). 1. Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until accredited conditions are fulfilled.In such case, notwithstanding the delivery of the goods to a buyer or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled. 2. Where goods are shipped or delivered to a railroad system administration for carriage by railway line and by the bill of lading or railway receipt, as the case may be, the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to reserve the right of disposal. . Where the seller of goods draws on the buyer for the price and transmits to the buyer the bill of exchange to stick toher with the bill of lading or, as the case may be, the railway receipt, to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading or the railway receipt if he does not honour the bill of exchange and, if he wrongfully retains the bill of lading or the railway receipt, the property in the goods does not pass to him. Explanation. In this section, the expressions railway and railway administration shall have the meanings one by one assigned to them under the Indian lines Act, 1890 . (9 of 1890 . ) Buyers right against seller Suit for damages for non-delivery Whe n the seller wrongfully refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery (Sec. 57) Suit for specific movement Where there is a breach of contract for sale of specific goods, the buyer may file a suit for specific performance.The remedy is granted when subject matter of the contract is rare goods, say, a take in by a dead painter (Sec. 58) Suit for damages for breach of warranty Where there is a breach of warranty, the buyer is entitled to sue for damages if he had paid the price to the seller. But if he has not paid the price yet, he may ask the seller for a reasonable reduction in theprice. (Sec. 59) Suit for cancellation and damages for breach of contract Where there is a breach of contract by the seller, the buyer may avoid the contract and claim damages. Suit for recovery of price with interestIf the buyer has already paid the price to the seller and the seller does not deliver the goods to thebuyer, he can sue the seller fo r refund of price and interest at a reasonable rate. (Sec. 61) Examples A case of an unpaid seller Case 1 Sir, If a sale deed has been entered saying that the consideration has been paid via a Demand Draft (i. e. issued by the beach on billhook of loan). However the demand draft has not really been encashed, as the loan was subsequently cancelled. However believe on the fact the DD will be encashed the seller signed the Sale Deed.Now as the amount is not actually paid, what can be the means to ticktock the unpaid money? If in the suit for recovery of balance amount the buyer is unable to pay the remaining consideration, then what other relief can be provided by the court of law? The buyer got the loan sanctioned by concealing trusted facts, so the DD was issued. However before the disbursement the beach came to know of the facts and the loan got cancelled. That is how the DD could not be encashed. The Bank had issued the DD on the basis of sealed facts. However certain import ant facts were concealed by the buyer from the Bank.Just before the DD could be encashed the Bank came to know the facts and they cancelled the DD. As a result the seller could not get the consideration. Case 2 Please my fellow join i need urgent help on this Mr. J sells and consigns certain goods to Mr. S for cash and sends the Railway Receipt to him. Mr. S becomes insolvent and while the goods are in transit, he assigns the Railway Receipt to Mr. N who does not know that Mr. S is insolvent. Mr. J cosmos an unpaid seller wants to exercise his rights. Advise (a) whether Mr. J can exercise the right of stoppage of goods in transit ? b) would your answer be different if Mr. N was aware of Mr. Js insolvency before the concession of the Railway Receipt in favour of Mr. N ? (a)Mr. J cannot exercise the right of stoppage of goods in transist, because the goods are being taken by Mr. N in good faith and for consideration. (b)Yes, Mr. J in this case can exercise his right of stoppage o f goods in Transit, as Mr. N has not acted in good faith. ( reviewerer to section 27 of The Sale of Goods Act, 1930) Ref http//www. caclubindia. com/forum/unpaid-seller-142227. asp. UKXVHIdJNGQ