Question from sales of goods act

 


Answer the following:

  1. Who is an unpaid seller under the Sale of Goods Act, 1930?
  2. What rights are available to A as an unpaid seller?
  3. Can A stop the goods in transit if the goods have not yet reached B?
  4. Can A resell the goods?
  5. Can A sue B for the price?

Answer

A is an unpaid seller because the whole price has not been paid and the outstanding amount remains due.

Under Section 45, a seller is an unpaid seller when:

  • the whole price has not been paid or tendered; or
  • a bill of exchange or other negotiable instrument received as conditional payment has been dishonoured.

Rights of A against the goods

Under the Sale of Goods Act, 1930, an unpaid seller has three principal rights against the goods:

1. Right of lien — Section 47
A may retain possession of the goods until B pays the price, subject to the conditions prescribed by law.

2. Right of stoppage in transit — Sections 50–52
Since B has become insolvent, A may stop the goods while they are still in transit and regain possession of them.

3. Right of resale — Section 54
A may resell the goods in accordance with Section 54. Generally, reasonable notice of resale should be given to the buyer where required by the section.

Rights against the buyer personally

A may also have:

4. Suit for price — Section 55
A can sue B for the price where the statutory conditions for such a suit are satisfied.

5. Suit for damages for non-acceptance — Section 56
Where the buyer wrongfully refuses or neglects to accept and pay for the goods, the seller may sue for damages.

Conclusion

Therefore, A is an unpaid seller and, because B has become insolvent, A can exercise the statutory remedies available to an unpaid seller, particularly the right of stoppage in transit, and may also exercise the right of resale subject to Section 54.

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