Rights of an Unpaid Seller

Who is an Unpaid Seller?

Unpaid sellers are those sellers to whom the buyer has failed to pay or has refused to pay for the goods. Sales are a set of reciprocal promises where both parties to the contract have to perform their part of the obligation in order to complete the contract. Under a sales contract, the seller is under the obligation to sell goods, and once the buyer has received the goods, he is under the obligation to pay for the goods received. In a case where the buyer has failed to pay or has refused to pay for the goods, the seller will be considered an unpaid seller, and he will be entitled to all the rights of an unpaid seller....

Rights of an Unpaid Seller

As per the Section 46 of the Sales of Goods Act, an unpaid seller has been given the following rights both against the goods and the buyer:...

Examples under Unpaid Seller

Example 1: Sachin from Delhi sent goods to Rachin from Agra for an invoice price of ₹1,00,000. On arrival of the carrier in Agra, Rachin only paid ₹40,000/- and refused to pay the rest of the goods. Now, as Sachin has not received the full payment from Rachin, he will get the title of unpaid seller....

Conclusion

A seller can be given the title of an unpaid seller when the seller has not been paid the whole price or the buyer of the goods has failed to meet the maturity of any bill of exchange or any other negotiable instrument paid as conditional payment. In such a case the seller may exercise lien on goods if he is in possession of them. In cases where the goods are in transit from seller to buyer, the act empowers the seller to stop the goods in transit and obtain possession of the goods. The unpaid seller is vested with several rights to protect his interest....

Rights of an Unpaid Seller- FAQs

Who is an unpaid seller?...