Question 2 OR (a)
Unpaid seller and his rights against the goods
10 marks
- Time to write
- About 20 minutes
From an older CBCS paper
Question
Question 2 OR (a) · 10 marksWho is an ‘unpaid seller’? What rights does he have, as against the goods, under the Sale of Goods Act 1930?
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
- Who…?What…?2 asks, each with its own marks below. Answer both.
Write it in this order
- Read; underline the asks; jot your points 1 min
- 1 Unpaid seller (section 45) 3 marks 5 min
- 2 Rights against the goods (section 46) 7 marks 13 min
- Check: every ask answered, key terms underlined 1 min
Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks.
Try it first. About 20 minutes for 10 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 (a) when the whole of the price has not been paid or tendered and he has an immediate right of action for it, or (b) when he took a bill of exchange or other negotiable instrument as conditional payment and the condition has failed, by dishonour of the instrument or otherwise. "Seller" here includes anyone in a seller's position, for example a seller's agent who holds the bill of lading by endorsement, or a consignor or agent who has paid the price himself or is directly answerable for it (s. 45(2)). Example: a wholesaler who sells rice on thirty days' credit becomes an unpaid seller once the thirty days have run and the price is still outstanding.
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). Even if the property in the goods has 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)).
Where the 10 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Unpaid seller (section 45) | 3 |
| 2 | Rights against the goods (section 46) | 7 |
| Total | 10 |
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