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What are the rights of an unpaid seller?

Unpaid seller
An unpaid seller is a person, who has sold the goods for a price, but the price has not been paid to him or the
instrument which was given to him has dishonored.
Rights of unpaid seller
An unpaid seller has the following rights
A. Right against goods
B. Right against buyer

A. Right against goods

1. Right of lien

An unpaid seller has the right to stop the delivery of goods and to keep the goods in his procession until the price is
paid. If he has delivered a part of goods, he can stop the delivery of remaining goods.
Seller can exercise the right of lien in the following cases;
i. When the goods are sold on cash
ii. When the goods are sold on credit and period of credit has been expired
iii. When the buyer becomes insolvent

Rules regarding lien


Following are the rules regarding the lien of goods.
i. When the goods are in the procession of seller
ii. The seller can use the right only for the price, not for the other charges
iii. If the seller has delivered a part of goods, he can retain the reminder

Example
a. A sells his car to b for Rs. 100,000 to be paid in cash. B fails to make the payment. A can retain the procession.
b. A sold a machine to B for Rs. 2000, it was not working properly so B delivered it back to A for repairs, it was held
that A could not stop the delivery.

2. Right of stoppage of goods in transit


When the buyer funds that the buyer became insolvent then he has the right of stopping the goods in transit.
The seller can use this right in the following cases
a. When the goods are still in transit
b. When the property has not passed to the buyer
c. When the buyer becomes insolvent
d. When the seller has right of topping of goods in transit

3. Right of resale

A seller has the right to resale the goods if the buyer does not pay the price of goods. Seller can use this right in
following cases
a. When the goods are of perishable nature and the buyer fails to pay the rice within reasonable time
b. When the seller has given the notice of his intention to resale
c. When he right to resale is expressed in contract between the parties.

B. Right against buyer

1. Price

If the seller has delivered goods and buyer fails to pay the price of goods. The seller has right to sue for the price of
goods.
Example
A Sold goods to B, B fails to pay the price. A can sue B for the recovery of price
2. Damages for non acceptance
When the seller has delivered the goods and the buyer refuses to accept them. The seller has right to sue for the
recovery of damages.
Example
A sold and delivered goods to B, but B refuses to accept the goods and pay the price. The seller has right to sue for the
recovery of damages
3. Special damages and interest

If the buyer fails to make the payment at agreed time but he will pay late. The seller has right to sue for the recovery of
interest at reasonable rate.
Example
A Sold goods to B, B fails to make payment and promised to pay later. A has right to sue for
the recovery of interest