Question 3 OR (c)
Unpaid seller's rights where property has not passed
6 marks
- Time to write
- About 12 minutes
- Topic
- Unpaid seller
Question
Question 3 OR (c) · 6 marksDiscuss what rights an unpaid seller has against the goods while the property in the goods has not yet passed to the buyer.
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
Read from the question
- DiscussEach point named and explained, not just listed.
Write it in this order
- Read; underline the asks; jot your points 1 min
- 1 Unpaid seller 1½ marks 2 min
- 2 Right of withholding delivery quasi-lien 3 marks 5 min
- 3 Other rights 1½ marks 2 min
- Check: every ask answered, key terms underlined 2 min
Short on time? Trim steps 1–3 evenly rather than skip one: each is capped at its own marks.
Try it first. About 12 minutes for 6 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. A seller is an unpaid seller when the price has not been paid or tendered in full, or a negotiable instrument taken as conditional payment has been dishonoured (s. 45). His rights against the goods depend on whether the property in the goods has passed to the buyer.
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.
Where property has not passed to the buyer (an agreement to sell), the seller is still the owner, and in addition to his other remedies he has a right of withholding delivery of the goods (s. 46(2)). This right is similar to lien and is called a "quasi-lien"; it is the additional right used in the case of an agreement to sell. Its features:
- It is co-extensive with the rights of lien and stoppage in transit that he has once the property has passed.
- He may withhold delivery until the price is paid or tendered, where the goods are not sold on credit, the credit period has expired, or the buyer has become insolvent.
- Ownership alone does not let him resell while the agreement stands: he may resell only where the Act gives an unpaid seller a right of resale.
Other rights. Against the buyer personally he may sue for damages for non-acceptance (s. 56) and for interest and special damages (s. 61); and if the buyer repudiates before the due date, he may treat the contract as rescinded and sue for damages (s. 60).
Where the 6 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Unpaid seller | 1.5 |
| 2 | Right of withholding delivery (quasi-lien) | 3 |
| 3 | Other rights | 1.5 |
| Total | 6 |
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