bl law

1. Unpaid Seller
BUSINESS LAW BBA-201 1

2. Unpaid Seller
PO2- Interpret the regulation concerning
the Contract of Sale of Goods Act, 1930
PO4- Develop communication and
professional presentation skills
Knowledge
Level- K3
Right of unpaid seller
PO2- Interpret the regulation concerning
the Contract of Sale of Goods Act, 1930
PO4- Develop communication and
professional presentation skills
Transfer of Property
PO2- Interpret the regulation concerning
the Contract of Sale of Goods Act, 1930
PO4- Develop communication and
professional presentation skills
Lecture Outcome
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3. Recapitulation
• It is the duty of the seller to deliver the goods and of the
buyer to accept and pay for them, in accordance with the
terms of the contract of sale. The performance of a
contract is a simple transaction where the seller delivers
the goods and the buyer pays.
• The rules regarding the delivery of goods are contained
in Sec. 33 to Sec. 39 of the Sale of Goods Act. Delivery
of goods may be defined as a voluntary transfer of
possession of goods from the seller to the buyer.
• Delivery of goods by installments is not considered as a
proper delivery and the buyer is not bound to accept the
goods delivered to him by installments unless otherwise
agreed. The pattern of delivery shall be determined by the
contract.
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4. LECTURE OVERVIEW
Unpaid Seller
Transfer of
Property
RIGHT OF
UNPAID
SELLER
Essentials of
transfer of
property
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5. UNPAID SELLER
According to sec 45(1) of Sale of GoodsAct, seller of the goods is deemed to
be
unpaid seller :
(A) When whole of the price has not been tendered or paid, or
(B)When bill of exchange or negotiable instrument has been received as a
conditional payment.
AND
The seller of goods can be deemed to be an unpaid seller:
1.if the price become due but they are not paid. He must have an immediate
right of
action for the price.
2.ABill of Exchange or negotiable instrument was received but was
dishonored.
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6. UNPAID SELLER
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7. RIGHTS OF UNPAID SELLER
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8. I .Rights against the goods can be discussed under two heads:
a. When property in goods has passed
b. When property in goods has not passed
1.When property in goods has passed :
The following 3 rights are available
a)Right of lien : is the right to retain the goods until whole of the price of goods is paid or tendered. Right
of lien can be exercised: where goods have been sold without any stipulation to credit. Where goods have
been sold on credit but period of credit has expired. Where buyer has become insolvent, even though the
period of credit has not yet expired
b)Right of stoppage in transit: is a right of stopping the goods in transit after the unpaid seller has
parted with the goods. If the goods are in transit he has a right to resume the possession of goods as long
as they are in the course of transit .this right is available to the unpaid seller only when the buyer become
insolvent and when the goods are in transit.
c)Right of Resale: unpaid seller can resell the goods if the goods are of perishable nature if seller give
the notice to buyer of his intention to resell and the buyer does not pay within the reasonable time if on
resale there is loss to seller he can recover from the buyer and if profit must handover to the buyer
BUSINESS LAW BBA-201
RIGHTS OF UNPAID SELLER
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9. II Rights against the buyer personally
1.Suit for Prices: Where property has passed, the seller can sue for the
price
2.Suit for damages for non acceptance: Where The buyer wrongfully refuse
to
accept and pay for goods, seller may sue him for non acceptance
3Repudiation of the contract before due date by buyer: the seller can treat
the contract as subsisting and wait till delivery or he may treat the contract
as rescinded and sue for damages
4Suit for interest: where there is a specific agreement between seller and
buyer as to interest on the price of the goods from the date the payment
become due ,seller can recover the interest from the buyer.
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RIGHTS OF UNPAID SELLER

11. The property in the goods is said, to be transferred from the seller to the buyer when the latter acquires the proprietary
rights over the goods and the obligations linked thereto. 'Property in Goods' which means the ownership of goods, is
different from ' possession of goods' which means the physical custody or control of the goods.
The transfer of property in the goods from the seller to the buyer is the essence of a contract of sale. Therefore the
moment when the property in goods passes from the seller to the buyer is significant for following reasons:
• Ownership - The moment the property in goods passes, the seller ceases to be their owner and the buyer acquires
the ownership. The buyer can exercise the proprietary rights over the goods. For example, the buyer may sue the
seller for non-delivery of the goods or when the seller has resold the goods, etc.
• Risk follows ownership - The general rule is that the risk follows the ownership, irrespective of whether the delivery
has been made or not. If the goods are damaged or destroyed, the loss shall be borne by the person who was the
owner of the goods at the time of damage or destruction. Thus the risk of loss prima facie is in the person in whom
the property is.
• Action Against Third parties - When the goods are in any way damaged or destroyed by the action of third parties, it
is only the owner of the goods who can take action against them.
• Suit for Price - The seller can sue the buyer for the price, unless otherwise agreed, only after the gods have become
the property of the buyer.
• Insolvency - In the event of insolvency of either the seller or the buyer, the question whether the goods can be taken
over by the Official Receiver or Assignee, will depend on whether the property in goods is with the party who has
become insolvent.
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TRANSFER OF PROPERTY IN GOODS
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13. The two essentials requirements for transfer of property in the goods are:
• Goods must be ascertained: Unless the goods are ascertained, they (or the
property therein) cannot pass from the seller to the buyer. Thus, where there
is a contract for the sale of unascertained goods, no property in the goods is
transferred to the buyer unless and until the goods are ascertained
• Intention to PASS Property in Goods must be there: In a sale of specific or
ascertained goods the property in them is transferred to the buyer at such
time as the parties to the contract intend it to be regard shall be had to the
terms of the contract, the conduct of the parties and the circumstances of the
case.
ESSENTIALS FOR TRANSFER OF PROPERTY
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BUSINESS LAW BBA-201

14. • Goods must be ascertained: Unless the goods are
ascertained, they (or the property therein) cannot
pass from the seller to the buyer. Thus, where there
is a contract for the sale of unascertained goods, no
property in the goods is transferred to the buyer
unless and until the goods are ascertained
According to sec 45(1) of Sale of Goods Act, seller of the
goods is deemed to be
unpaid seller A) When whole of the price has not been
tendered or paid, or
(B) When bill of exchange or negotiable instrument has
been received as a conditional payment.
 The property in the goods is said, to be
transferred from the seller to the buyer
when the latter acquires the proprietary
rights over the goods and the
obligations linked thereto. 'Property in
Goods' which means the ownership of
goods, is different from ' possession of
goods' which means the physical
custody or control of the goods.
Summary
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15. • OUR FIRST REFERNCE
•KUCHHAL, M.C. AND
VIVEKKUCHHAL, BUSINESS LAW,
VIKAS PUBLISHING HOUSE, NEW
DELHI.
• OUR SECOND REFERNCE
•PATHAK A. , LEGAL ASPECT OF
BUSINESS, MCGRAW HILL
EDUCATION
• OUR THIRD REFERNCE
•N.D.KAPOOR, SULTAN CHAND,
NEW DELHI "BUSINESS LAW".
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16. Thank
You
Do you have any
questions?
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