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Unpaid seller business law

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Unpaid seller business law Unpaid seller business law Presentation Transcript

  • UNPAID SELLER AND HIS RIGHTS Priya Khade P1022 Charusheela Khandale P1024 Kinnar Majithia P1026 Saloni Marphatia P1028 Arjun Mishra P1030
  • 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
  • Rights 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
  • Overview of rights of Unpaid Seller
  • RIGHT OF LIEN
      • Possession is essential to create right of lien
      • Lien is of two kinds:
        • General Lien
        • Particular/Specific Lien
  • Right 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
  • Sec. 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”
  • Sec. 49 – Termination of Lien
    • Seller delivers goods to carrier/bailee for transmission to buyer without reserving right of disposal of goods.
    • Buyer lawfully obtains possession of goods.
    • Seller waives his right of lien.
  • Right of Stoppage in Transit-Section 50
    • 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
    • Section 51
    • Duration 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
    • 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 is
    • 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 or
    • stoppage in transit
    • Right of stoppage in transit is lost whe n:
    • 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
  • Right of Resale of unpaid seller -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.
  • Circumstances for 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
    • 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.
    • 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.
    • If property in goods has not passed to buyer, seller has the Right to Withhold Delivery .
    • Section 25-Reservation of Right of Disposal
    • This is retained by seller when the seller imposes certain conditions and until conditions are fulfilled.
  • Sec. 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.
  • Effect of Sub-Sale or Pledge by buyer-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.
    • THANK YOU