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Unpaid seller business law
An unpaid seller is a seller who has not received full or partial payment for goods sold. As an unpaid seller, they have certain rights depending on whether property in the goods has passed to the buyer. These rights include lien, stoppage in transit, resale, and withholding delivery. The right of lien allows the seller to keep possession of goods until payment. Stoppage in transit applies when goods are in transit and the buyer becomes insolvent. An unpaid seller also has the right to resell goods in certain circumstances after providing notice to the buyer. If property has not passed, the seller can withhold delivery of goods until payment or conditions are fulfilled.
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Unpaid seller business law
- 1. UNPAID SELLERUNPAID SELLER ANDHIS RIGHTS Priya Khade P1022 Charusheela Khandale P1024 Kinnar Majithia P1026 Saloni Marphatia P1028 Arjun Mishra P1030
- 2. Who is anUnpaid Seller?Who is an Unpaid Seller? Seller who has not been paid (either in the whole or partial) One who has received payment in the form of bill of exchange or other negotiable instrument which has been dishonored
- 3. Rights of anUnpaid SellerRights of an Unpaid Seller When property of goods passed to buyer Right of Lien Right of Stoppage in Transit Right of Resale When property of goods not passed to buyer Right of Withholding Delivery Other Rights
- 4. Overview of rightsof Unpaid SellerOverview of rights of Unpaid Seller
- 5. RIGHT OF LIENRIGHTOF LIEN Possession is essential to create right of lien Lien is of two kinds: 1. General Lien 2. Particular/Specific Lien
- 6. Right of Lienof Unpaid Seller –Sec. 47Right of Lien of Unpaid Seller –Sec. 47 • Applicability: Goods sold without any stipulation as to credit Goods sold on credit, credit-term expires Buyer becomes insolvent, seller possesses goods
- 7. Sec. 48 -Part Delivery of GoodsSec. 48 - Part Delivery of Goods Right of lien applicable to undelivered goods unless agreement to waive lien has been made “Delivery of the part does not constitute the delivery of the whole”
- 8. Sec. 49 –Termination of LienSec. 49 – Termination of Lien 1. Seller delivers goods to carrier/bailee for transmission to buyer without reserving right of disposal of goods. 2. Buyer lawfully obtains possession of goods. 3. Seller waives his right of lien.
- 9. Right of Stoppagein Transit-SectionRight of Stoppage in Transit-Section 5050 Essentials Seller must be partially/wholly unpaid Buyer must have become insolvent Goods must be in transit Eg: Seller has parted with possession of goods and buyer has not received the goods
- 10. Section 51Section 51 Durationof TransitDuration of Transit • Transit ends when: Buyer takes delivery of goods Buyer/his agent takes deliver of goods before appointed destination i.e. in anticipation Carrier/bailee at appointed destination acknowledges possession of goods Carrier/bailee wrongfully refuses to deliver goods to buyer/his agent
- 11. Buyer refuses thegoods:Buyer refuses the goods: If buyer refuses goods-transit does NOT come to an end, even if seller refuses to take them back. Goods continues to be in possession of bailee Section 52: How Right of Stoppage in transit isSection 52: How Right of Stoppage in transit is effected by the seller:effected by the seller: Taking actual possession of goods Giving notice of his claim to carrier/bailee who possesses goods or to redirect goods to seller or according to his directions Sale generally not rescinded by lien orSale generally not rescinded by lien or stoppage in transitstoppage in transit
- 12. Right of stoppagein transit is lost wheRight of stoppage in transit is lost when: Buyer/his agent obtains delivery of goods from carrier/bailee After arrival of goods at appointed destination, carrier/bailee acknowledges to buyer that he holds goods on his behalf Carrier/bailee wrongfully refuses to deliver goods to buyer/his agent
- 13. Right of Resaleof unpaid sellerRight of Resale of unpaid seller -Section 54-Section 54 • Unpaid seller can resale his goods after executing his Right of Lien on retaining his goods or after exercising his Right to Stoppage in Transit upon insolvency of the buyer under some circumstances.
- 14. Circumstances for Resale:Circumstancesfor Resale: Where goods are perishable Where seller gives notice to buyer of his intention to resell and buyer does not pay the price within a reasonable time after the notice Where seller has expressly reserved his right of resale in case of default
- 15. If the sellerhas given notice to the buyer:If the seller has given notice to the buyer: He can hold the buyer responsible for loss suffered due to breach of contract. Profits earned on resale are retained by the unpaid seller.
- 16. If notice hasnot been given to the buyer:If notice has not been given to the buyer: Seller cannot recover damages from buyer. Seller has to pay the profits if any to the buyer. Seller can claim difference between the contract price and the market price at the date of the breach.
- 17. •If property ingoods has not passed to buyer, seller has the Right to Withhold Delivery. Section 25-Reservation of Right of DisposalSection 25-Reservation of Right of Disposal This is retained by seller when the seller imposes certain conditions and until conditions are fulfilled.
- 18. Sec. 55 &56 – Other RightsSec. 55 & 56 – Other Rights Sue the buyer for price of goods Seller may sue buyer for damages for wrongfully neglecting/refusing to accept the goods Recover interest from buyer where there is a specific agreement to that effect. If there is no agreement, seller may charge interest on price when it becomes due.
- 19. Effect of Sub-Saleor Pledge byEffect of Sub-Sale or Pledge by buyer-Section 53buyer-Section 53 In case of transfer of goods by buyer, the unpaid seller’s right of lien or stoppage in transit can be exercised subject to rights of transferee. When pledgee sells goods, the unpaid seller is entitled to receive the surplus sale proceeds.
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