Rights of unpaid seller

“Unpaid seller”
a) Whole of the price not paid/tendered
b) B.E./other N.I. received as conditional payment,
c) But not yet fulfilled due to dishonour of the instruments
d) Seller can be agent of seller endorsed/consigner or agent
who paid personally or directly responsible for price
Question?
 J co. Sold some quantity of citric acid crystals to P who resold it to M & B
 Later, due to bad quality of crystals, the P rejected the goods
 J co. said they will refund price & send a cheque to M & B
 The cheque bounced
 Can M & B retain the goods as “unpaid seller” till the refund was made?

s.46- unpaid seller’s right

1. Right of lien when goods are possessed
2. Right to stoppage in transit, when buyer is insolvent & parted the possession
3. Right to resale
4. Right to withhold delivery
- These are applicable, if property has passed
- If property not passed except 1, all the other rights are available
I) s.47- Unpaid seller’s lien
II) Right to retain the goods until the payment of price/tender of price-
III) Possession of goods
IV) Goods sold w/o stipulations as to price
V) Goods sold in credit, but the term of credit expired
VI) Buyer is insolvent
VII) Irrespective o f whether he is agent/bailee of buyer
s.48- part delivery
 If part delivery is done
 Unless an agreement to contrary exist
 Right of lien exist in reminder of goods
- Installment deliveries- no right of lien unless the buyer becomes insolvent
s.49- Termination of Lien
1) Delivers goods to agent/carrier/bailee for transmission of goods to buyer w/o reserving the right of disposal
2) Buyer/his agent lawfully obtains the possession of goods
3) Waiver
4) No loss even if obtained a decree for price
Valpy v. gibson, 1847
 Goods were sold & sent at the request of buyers to their agents by seller & put on board
 Took them back for some repacking
 Buyers became insolvent
 Seller’s tried to impose their lien right
 No reservation as to right of disposal was made
 Held: Lien right was lost
II) Right to stoppage in transit -S.50
 Subject to provisions of the Act
 Buyer becomes insolvent
 Seller parted with possession
 Goods in transit
 Unpaid seller has
 - right to stoppage & resume possession

- right to retain till the payment/tender of price

s.51- duration of transit

 goods rejected by buyer & carrier/agent continues possession, goods in transit even if seller refused to take the
delivery

 If carrier/bailee refuse wrongfully to deliver the goods to buyer, the transit ends

 Part delivery- right can be exercised in rest of the goods

Great indian peninsula rly co v. Hanmanndas, 1889,bom hc

 Goods in G.I.P.Ry.Co----- to buyer

 Co. delivered and buyer loaded it into his cart

 Cart had not left the railway compound

 Telegram send to stop the goods

 Co. didn’t do the same

 Seller sued the Ry. Co for damages

 HELD: As soon as the goods were handed to buyer-transit ended, so Ry. Co has no power to stop

Ex parte golding Davis & co,

1883, ch. D

s.52- how stoppage in transit is effected

 By taking actual possession

 By giving notice to the carrier/other bailee and

 Notice also to buyer/his agent- so that the P can within reasonable time notify agent/servant to prevent delivery

 When notice is given- expenses for redelivery shall be borne by the seller himself

 Redelivery to be done by the carrier/agent to seller/as per directions

R V Ward Ltd v. Bignall, 1967,QB

 VANGUARD & ZODIAC- £ 850

 Buyer gave - £ 25 as deposit- failed to pay

 Reasonable notice was given

 He could resell only Vanguard

 So claimed damages for price of zodiac & also advertising charge- £ 475(£ 359 + £22)
  Held: when he exercises his resell right, the property is deeded as his own, so he cannot claim money for Zodiac, but
only shortfall while selling Vanguard & advertising charges

Conditions and warranties ?

 Express conditions

- expressed

- Breach: repudiate & sue for damages

 Express warranties

- expressed one- auxiliary promises

- Breach: No repudiation, only damages

 Implied conditions/warranties: Those implied by law into the contract

 To determine the same- “intention of parties”

 For a condition as such that if not fulfilled, the contract can be repudiated / mere collateral contract

Goods not answering the description

• Remedy one

• - Reject the goods

• - Refund price

• Sue for non-delivery & seek the damage

• Remedy two

• - Waive the condition

• - Accept the goods

• Sues for breach of warranty

I) Implied condition as to title- s.14

Rowland v. Divall, 1923, KB
Niblett Ltd v. Confectioner’s Material Co Ltd, 1921, KB
Implied condition as to quality/fitness
 Subject to provisions of this Act/any other law
 No implied condition/warranty as to fitness/quality
 Particular purpose of goods supplied u/COS
1. s.16(1)- 1. Buyer made known to seller the particular purpose
Priest v. Last, 1903,KB
2. Buyer relied upon the seller’s skill/judgment
Grant v. Australian Knitting Mills, 1936,CA
 3. Goods must of the description which is in the course of the seller’s business to supply
Exception of trade name- proviso, s.16(1)
Bankes LJ:
“Did the buyer specify the trade name in such a way as to indicate that he is satisfied
rightly/wrongly, that it will answer his purpose, and that he is not relying on the skill or judgment
of seller, however great the skill or judgment may be?”
Baldry v. Marshall, 1925,KB
Sale by sample-s.17
 Bulk shall correspond to the sample
 Buyer given reasonable opportunity to inspect
 Goods free from defects rendering them unmerchantable which is not apparent on reasonable examination
 E& S Ruben v. Faire Bros & co Ltd, 1949, KB
Goldey v. Perry, 1960

Transfer Of Property

Its important to know when exactly property passes because:

a) Risk follows ownership

b) Action against 3rd party- only owner can claim from 3rd party

c) Suit for price

3 stages of performance of contract of sale

1. Transfer of Property in goods

2. Transfer of Possession of Goods i.e., Delivery

3. Passing of Risk

Passing of property/Transfer of property

 S.18- unascertained goods- unless ascertained

 If goods needs to be measured, weighed or severed, then it doesn’t pass unless the same is done

s.23- Sale of unascertained goods & appropriation

 Sale of unascertained/future goods by description

 At deliverable state are appropriated (Ex/Im)

1. by seller with consent of buyer

2. by buyer with consent of seller

 Then, the property passes

 Unconditional Appropriation is done if

 1. seller delivers the goods to buyer/carrier/bailee for transmitting

2. No reservations as to right to disposal by seller

RIGHTS AND DUTIES OF AGENT

Duty not to delegate his duties(sec.190)

When an agent has undertaken to perform certain duties personally, he is not allowed to delegate his duties to another
person. the rule is contained in the maxim ‘delegatus not potest delegare’.which means that an agent to whom some authority
has been delicated cannot further delicate that authority to another person. The relationship of principal and agent is based on
the concept of confidence and trust. when the principal has reposed trust in a particular agent , the agent cannot substitute
another person in his place .in other words, an agent cannot employ a sub agent to get the work done through him. An agent
who has undertaken to do some work personally can,t employ a sub agent to do the same.

Rights of agent [duties of principal]

Every agent has the rights against the principal

1.Agent’s right of retainer out of sums received on principal’s account: sec.217 of the contract actprovides that an agent