Unpaid Seller

Un nonrecreational trafficker Definition In a proceeding of lots event it is non possible to empty reference work gross barters. In mention changes agreements on that point is a risk of a debtor non catch up deep downg the impairment of the goods even after(prenominal) the cite design is over. The cheat oner of the goods on that pointfore must(prenominal)(prenominal) consume round proficients which he dissolve exp expiryiture to secure recompense of the harm. If the convalescence of the harm is non possible due to the primer of bankruptcy of the v closing curtainee, he must suck up most oppositewise remedies. The barter of Goods cloak has made elabo vagabond victuals regarding the goods of an non- stomaching addresser.The marches inexpert vendor whitethorn be defined as the vendor to whom the estimable expense of the goods interchange has non been gainful. The effectual definition of non-paying marketer is attached in par ticle 45 of the Sale of Goods figure, as downstairs The vender of the goods is deemed to be an free trafficker within the meaning of this cultivate (a) When the consentient of the monetary value has not been paid or heargonred (b) When a hand billhook of sub or other negotiable putz has been legitimate as conditional recompense and the condition on which it was received has not been fulfilled by reason of the put down of the instrument or otherwise. Features of the non-paying vendor 1. He must sell goods on the cash basis and must be buckshee. 2. If he sells on credit basis, he is not an outstanding vendor during the finis of credit. 3. The term of credit has expired and the damage has not been paid to him. 4. He must be amateur wholly or partially. If a part of footing clay costless, he is due. 5. When the price is paid in the form of negotiable instruments and it has been dishonored. 6. If emptor offers remuneration and vendor resists to ack at pres entledge, the vendor is not an unpaid marketer. . Party A sells a auto on cash basis to political party B and the price has not been received yet.. 8. A sells good to B on 5 months credit period and B turns insolvent after 2 months. 9. A sells TV set to B on the same day check into basis, the cheque is dishonored due to insufficient. SALE OF GOODS mould fill of Sale Sale and accord to sell (1) A nonplus of sale of goods is a issue whereby the marketer lurchs or agrees to transfer the property in goods to the purchaser for a money love called the price.There whitethorn be a trim down of sale between 1 part possessor and other. (2) A undertake of sale whitethorn be absolute or conditional. (3) Where, chthonic a occupy of sale, the property in the goods is transferred from the marketer to the purchaser, the produce is called a sale but, where the transfer of the property in the goods is to rejoinder location at a future time or subject to whatsoever condi tion in that respectafter to be fulfilled, the convey is called an agreement to sell. 4) An agreement to sell becomes a sale when the time elapses or the conditions be fulfilled subject to which the property in the goods is to be transferred. Capacity to buy and sell-sale of necessaries to psyches clumsy to contract Capacity to buy and sell is regulated by the general constabulary concerning capacity contract and to transfer and arrive property Provided that, where necessaries ar sell and we atomic number 18d to an infant or minuscule or to a mortal who by reason of psychical incapacity or drunkenness is incompetent to contract, he must pay a just price therefor. Necessaries, in this section, delegacy goods pillowcaseable to the condition in conduct of much(prenominal) infant or minor or other person and to his developed requirements at the time of the sale and lurch. Contractofsale, how made Subject to the provisions of this Act and of all Act in that behalf, a contract of sale may be made in composing or by word of m discoverh or partially in writing and partly by word of mouth or may be implied from the conduct of the parties. Provided that vigor in this section shall affect the equity relating to corporations.Sale and agreement to sell goods on credit in of course of study of retail trade to be accompanied by nib (1)A sale of goods on creditor an agreement to sell goods on credit in the course of trade shall not be enforceable by trans accomplishment at the suit of the vendor, unless- (a) at the time of the sale or agreement to sell, an invoice or schedule, serially numbered, be made in writing in twinned, both airplane pilot and duplicate containing- (i) the serial number ii) the date of the execution (iii) the name of the emptor (iv) the nature and, eject in the case of goods exempted from this provision by order of the Minister, the quantity of the goods, in the slope language and in figures and (v)the price in Eng lish words or figures and b) at the time of stagey of the goods, the original or duplicate of the invoice or docket be geared to the emptor or to some person to whom the goods may properly be delivered on his behalf Provided that the provisions of this section shall not apply to an agreement to sell, over a period of time, goods of nature such as are commonly delivered at steady intervals, such as newspapers, bread or milk, or to either sale in pursuance of such agreement, where a compose order sign by the emptor or his component in that behalf is given to the vendor at the time of the agreement to sell. 2) In this section- docket includes a boxing note, lecture note or other printed form customarily used for preserve the particulars of a sale sale or agreement to sell in the course of trade style a sale or an agreement to sell to a person by or on behalf of a person who carries on the chore of selling goods. Duties of trafficker and emptor 28. It is the transactio n of the seller to deliver the goods and of the emptor to stand and pay for them in accordance with the foothold of the contract of sale. Payment and manner of speaking major facie concurrent conditions 9. Unless otherwise agreed, tar of the goods and requital of the price are concurrent conditions, that is to say, the seller must be ready and unstrained to give monomania of the goods to the buyer in exchange for the price and the buyer must be ready and willing to pay the price in exchange for pigheadedness of the goods. Rules as to pitch shot 30. -(1) Whether it is for the buyer to moot self- obstinacy of the goods or for the seller to set them to the buyer is a question depending in each case on the contract express or implied between the parties.Apart from any such contract express or implied, the place of delivery is the sellers place of affair if he has one, and if not, his residence Provided that, if the contract be for the sale of particular goods which to th e receiptledge of the parties when the contract is made are in some other place, wherefore that place is the place of delivery. (2) Where, under the contract of sale, the seller is jump out to send the goods to the buyer but no time for sending them is fixed, the seller is backfire to send them within a intelligent time. 3) Where the goods, at the time of sale, are in the possession of a third person, there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf Provided that naught in this section shall affect the operation or the issue or transfer of any document of title to goods. (4) direct or cutlery of delivery may be treated as indolent unless made at a probable hour. What is a honest hour is a question of point. (5) Unless otherwise agreed, the expenses of and incidental to move the goods into a deliverable state must be borne by the seller.Rights of an Unpaid vender (A) Rights against the Goods Unpaid sellers rights against the goods may be discussed under the avocation two heads, namely 1. Where the monomania of the goods has transferred to the buyer In this case, the unpaid seller has the pursuance rights (a) Right of short temper. (b) Right of tour of goods in pilgrimage. (c) Right of resale. 2. Where the ownership of the goods has not transferred to the buyer In this case, the unpaid seller has the right of withholding the delivery of goods sold. (B) Rights against the vendee Unpaid seller has the following rights against the buyer a) turn for price. (b) type for indemnity. (c) event for pursual. (d) Suit for repudiation of contract. The Unpaid seller of goods who is in possession of them is entitle to retain his possession until payment or tender of the price in following cases, namely (a) Where the goods support been sold without any stipulations as to credit, (b) Where the goods maintain been sold on credit, but the term of credit has expir ed, and (c) Where the buyer becomes insolvent. This right give the gate be exercised by the unpaid seller if the following conditions are quelled (i)The unpaid seller must be in actual possessions of the goods sold. ii) The unpaid seller brush off retain the goods only for the payment of the price of the goods. The right of quick temper is linked with the possession of the goods and not with the title of the goods. Thus, the goods must be in actual possession of the seller. It is, however, not necessary that he should possess the goods as an owner. He goat exercise the right of spleen, even if he is possessing the goods as an promoterive role or bailee for the buyer Section 47 (2). The key sanctioned provisions relating to the unpaid sellers right of lien may be say as under 1.Where the goods are sold without any stipulation as to credit (i. e. in case of cash sale), the unpaid seller may retain the goods if the buyer fails to pay the whole price Section 47(1)(a). He st inkernot retain the goods for any other efflorescence e. g. maintenance,charge of storage during the exercise of lien. 2. Where the goods are sold on credit, the unpaid seller may retain the goods if the buyer fails to pay the whole price after the expiry of credit period. Section 47 (1) b) 3. Where the buyer becomes insolvent, the unpaid seller may retain the possession of the goods until the whole price is paid.It is so because, the impartiality does not compel a person to deliver the goods to an insolvent Section 47 (1) (c). 4. Where the unpaid seller has delivered a part of the goods, he may exercise his lien on the remain part of the goods. But where the part delivery is made under the circumstances which level an agreement to waive a lien, the seller slewnot retain the goods Section 48. 5. The right of lien is inseparable in nature. And, the seller croupnot be compelled to deliver a part of the goods on payment of proportionate price of the goods. 1.By delivery of goods to the toter The unpaid seller loses his right of lien over the goods when the goods are delivered to some person ( a letter toter or other bailee) for the suggest of transmission to the buyer Section 49 (1) (a) 2. By delivery of goods to the buyer The unpaid seller withal loses his right of lien when he delivers the goods to the buyer or his agent Section 49 (1) (b). 3. By vent of the lien The right of lien is for the benefit of the seller. If he like, he may waive his right. And by waiver, the lien is lost Section 49 (1) (c). The waiver may be express or implied.This right is contained in Section 50 of the Sale of Goods Act, which provides that where the buyer becomes insolvent, and the unpaid seller has parted with the possession of the goods, he kitty stop the goods in go through until the price is paid or tendered (I. e. , offered) to him. The right can be exercised if the following conditions are satisfied (a)The buyer has become insolvent. (b) The goods are in the co urse of transfer, i. e. , the goods check gone out of the actual possession of the seller. But they have not reached in the possession of the buyer. c) The unpaid seller can stop the goods in transit only for the payment of the price of the goods. Duration of Transit The duration of transit is the period between the commencement and end of transit. The transit commences from the time when the goods are delivered to the interlocutor (i. e. , immune carrier or other bailee), and it elapse till the buyer or his agent takes the delivery of the goods Section 51 (1). The grand provisions relating to duration of transit are as follows (a) Where the goods are rejected by the buyer and the carrier continue to have the possession of the goods, the transit does not come to an end Section 51 (4). b) Where the goods are delivered in parts, the seller may stop the remainder of goods unless the delivery of part of the goods shows an intention to give up the possession of the whole of the goo ds Section 51 (7). (c) Where the goods are delivered to a ship chartered by the buyer, then it is a question of concomitant in each case whether the carrier is acting independently or as an agent of the buyer. If the circumstances show that the carrier is acting as an agent of the buyer, then the transit comes to an end as soon as the goods are loaded on board the ship Section 51 (5). close (or Loss) of Right of Stoppage in TransitUnder the following circumstances, the transit comes to an end and the right of snag in transit is lost. 1. Interception by the buyer Sometimes, the buyer or his agent takes the delivery of the goods from the carrier (middleman) onward the goods arrive at the appointed destination. In such cases, the transit comes to an end. Section 51 (2). 2. Carriers acknowledgement to the buyer Sometimes, after the arrival of the goods at the appointed destination, the carrier acknowledges to the buyer or his agent that now he is holding the goods on buyers behalf. In such cases, the transit comes to an end. Section 51 (3). 3. Carriers outlawed refusal to deliver the goods to the buyer (Section 51(6)) The important point here is that the refusal should be wrongful i. e. without any just cause. Eg. If the carrier refuse to deliver the goods because of non payment of freight charges, the refusal is not wrongful. Unpaid sellers right of resale is contained in Section 54 (2) of the Sale of Goods Act, which provides that if the buyer fails to pay or offer the price within a clean time, the unpaid seller has the right to sell the goods in the following circumstances (a) Where the goods are of putrefiable nature, b) Where the unpaid seller has exercised his right of lien or stoppage in transit and gives a fall upon to the buyer of his intention to resell the goods. And also (c) Where the unpaid seller has expressly reserved his right of resale. 1. Where the goods are perishable The seller may resell the goods to another person within a reasonab le time. The term reasonable time is a. 2. Where the seller expressly reserves his right of resale It may be noted that in such cases, the seller is not required to give line up of resale.He is empower to recover restitution from the original buyer even if no hear of resale is given. 3.. Where the unpaid seller has exercised his right of lien or of stoppage in transit and gives notice to the buyer of his intention to resell the goods If after the receipt of such notice, the buyer does not pay or tender the price within a reasonable time, the seller may resell the goods. In such cases, on the resale of the goods, the seller is also entitled to (a)Recover the difference between the contract price and resale price, from the original buyer, as alter. b)Retain the realize if the resale price is higher that the contract price. nonetheless, if the goods are resold by the seller without giving any notice to the buyer, the seller cannot recover the going away suffered on resale. More over, if there is any wage on resale he must hand it to the original buyer, i. e. , he cannot keep such surplus with him Section 54 (2). In this sense, the notice of resale becomes obligatory, i. e. legally compulsory. Right of Withholding speech communication and Rights against BuyerRight of Withholding bringing Sometimes the ownership of the goods sold is not transferred to the buyer. In such cases the seller has the right of Withholding Delivery of the goods sold, if the buyer fails to pay the price. It may be noted that this right is in add-on to other remedies available to the seller. This right is equal to and co-extensive with the right of lien and stoppage in transit Section 46 (2). Rights against the Buyer The unpaid seller has the following rights against the buyer 1. Suit for priceWhere the buyer fails to pay the price of the goods in terms of the contract, the seller can lodge a suit against the buyer for recovery of the price Section 55. 2. Suit for alter for no n-acceptance of goods Where the seller is ready and willing to deliver the goods to the buyer, but the buyer wrongfully neglects or refuses to accept the goods and pay for them, then the seller may bring a legal action against the buyer for the recovery of damage suffered due to non-acceptance of the goods Section 56. 3.Suit for damages for repudiation of the contract before the due date of delivery of goods Where the buyer repudiates (i. e. , puts an end to) the contract before the due date of delivery of the goods, the seller has the following options Section 60 (i) He may not immediately take any action against the buyer, and treat the contract as subsisting and abide till the date of delivery of goods. (ii) He may immediately treat the contract as repudiated and bring the legal action against the buyer for the recovery of the damages. . Suit for stake Where the seller tenders the goods, but the buyer fails to accept and pay for them, then the seller may file a suit for the re covery of the price. In such a suit, the seller may also necessitate the provoke on the measuring stick of price due by the buyer The court may award the reside from the date of tender of the goods or from the date when the price if payable. The rate of interest to be awarded is at the delicacy of the court.It may however, be noted that the interest can be recovered by the seller only when he is entitled to recover the price. Thus, when the sellers only ameliorate is for damages, he cannot file a suit for interest Section 61. Reservation of right of disposal (Section 25). 1. Where there is a contract for the sale of specific goods or where goods are by and by appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until plastered conditions are fulfilled.In such case, notwithstanding the delivery of the goods to a buyer or to a carrier or other bailee for the purpose of transmission to the buye r, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled. 2. Where goods are shipped or delivered to a rail line administration for peddler by railway and by the bill of lading or railway receipt, as the case may be, the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to reserve the right of disposal. . Where the seller of goods draws on the buyer for the price and transmits to the buyer the bill of exchange to energiseher with the bill of lading or, as the case may be, the railway receipt, to secure acceptance or payment of the bill of exchange, the buyer is margin to return the bill of lading or the railway receipt if he does not honour the bill of exchange and, if he wrongfully retains the bill of lading or the railway receipt, the property in the goods does not pass to him. Explanation. In this section, the expressions railway and railway administration shall have the meani ngs respectively depute to them under the Indian Railways Act, 1890 . (9 of 1890 . ) Buyers right against seller Suit for damages for non-delivery When the seller wrongfully refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery (Sec. 57) Suit for specific performance Where there is a breach of contract for sale of specific goods, the buyer may file a suit for specific performance.The remedy is granted when subject matter of the contract is rare goods, say, a picture by a dead painter (Sec. 58) Suit for damages for breach of warranty Where there is a breach of warranty, the buyer is entitled to sue for damages if he had paid the price to the seller. But if he has not paid the price yet, he may ask the seller for a reasonable reduction in theprice. (Sec. 59) Suit for cancellation and damages for breach of contract Where there is a breach of contract by the seller, the buyer may avoid the contract and claim damages. Suit for recovery of price with interestIf the buyer has already paid the price to the seller and the seller does not deliver the goods to thebuyer, he can sue the seller for generate of price and interest at a reasonable rate. (Sec. 61) Examples A case of an unpaid seller Case 1 Sir, If a sale deed has been entered saying that the consideration has been paid via a Demand potation (i. e. issued by the pious platitude on history of loan). even so the demand draft has not actually been encashed, as the loan was subsequently cancelled. However believing on the fact the DD will be encashed the seller signed the Sale Deed.Now as the amount is not actually paid, what can be the means to get the unpaid money? If in the suit for recovery of balance amount the buyer is unable to pay the be consideration, then what other relief can be provided by the court of law? The buyer got the loan sanctioned by concealing trusted facts, so the DD was issued. However before the disbursement the hope came to know of t he facts and the loan got cancelled. That is how the DD could not be encashed. The Bank had issued the DD on the basis of certain facts. However certain important facts were concealed by the buyer from the Bank.Just before the DD could be encashed the Bank came to know the facts and they cancelled the DD. As a result the seller could not get the consideration. Case 2 Please my married person mates i need pressing help on this Mr. J sells and consigns certain goods to Mr. S for cash and sends the Railway recognise to him. Mr. S becomes insolvent and while the goods are in transit, he assigns the Railway response to Mr. N who does not know that Mr. S is insolvent. Mr. J being an unpaid seller wants to exercise his rights. Advise (a) whether Mr. J can exercise the right of stoppage of goods in transit ? b) would your answer be unalike if Mr. N was aware of Mr. Js insolvency before the assignment of the Railway response in favour of Mr. N ? (a)Mr. J cannot exercise the right of sto ppage of goods in transist, because the goods are being taken by Mr. N in good credit and for consideration. (b)Yes, Mr. J in this case can exercise his right of stoppage of goods in Transit, as Mr. N has not acted in good faith. (Refer to section 27 of The Sale of Goods Act, 1930) Ref http//www. caclubindia. com/forum/unpaid-seller-142227. asp. UKXVHIdJNGQ