Question 3 OR (a)

Rights of an unpaid seller against the goods

9 marks

Time to write: About 18 minutes

From an older CBCS paper

Question

Question 3 OR (a) · 9 marks

Against the goods, Explain the rights of an unpaid seller.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

18 minfor 9 marks

Read from the question

ExplainEach point stated, then explained in a line or two.

Write it in this order

Read; underline the asks; jot your points 1 min
1 Unpaid seller (section 45) 2 marks 4 min
2 Lien, stoppage in transit, resale 5 marks 9 min
3 Withholding delivery 2 marks 3 min
Check: every ask answered, key terms underlined 1 min

123

Short on time? Trim steps 1–3 evenly rather than skip one: each is capped at its own marks.

Try it first. About 18 minutes for 9 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Unpaid seller. Under section 45(1) of the Sale of Goods Act, 1930, a seller is an unpaid seller when the price has not been paid or tendered in full and he has an immediate right of action for it, or when a bill of exchange or other negotiable instrument received as conditional payment has been dishonoured.

Picture itRights of an unpaid seller against the goods

1No payment yet, so Karim locks the crates and folds his arms—the goods stay with him.

LienThe right to retain the goods in his possession until payment or tender of the price.

2Word comes that the buyer has gone broke: he races the truck down the highway to stop it.

Stoppage in transitWhere the buyer becomes insolvent, the right to stop the goods while they are in the course of transit.

3The mangoes will not wait, so he sells them fresh to the next buyer at the market.

ResaleWhere the goods are perishable.

Rights against the goods (s. 46). Notwithstanding that the property may have passed to the buyer, the unpaid seller has:

Lien: a right to keep the goods, while they are still in his possession, until the price is paid. He may exercise it where the goods were sold with no term of credit, where they were sold on credit and the credit period has run out, or where the buyer has become insolvent (s. 47);
Stoppage in transit: in case of the buyer's insolvency, a right to stop the goods in transit once he has parted with possession of them; and
Resale (s. 54): he may resell goods of a perishable nature; he may resell any goods after giving the buyer notice of his intention to do so, if the buyer still does not pay or tender the price within a reasonable time; and he may resell where the contract expressly reserves a right of resale on the buyer's default. Where the property has not passed, he has in addition a right to withhold delivery that matches, in scope, his rights of lien and stoppage in transit (s. 46(2)).

Conclusion. The unpaid seller's rights against the goods protect him even after property has passed, so long as he can still reach the goods.

Where the 9 marks sit

#	Component	Marks
1	Unpaid seller (section 45)	2
2	Lien, stoppage in transit, resale	5
3	Withholding delivery	2
	Total	9

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