Who is an Unpaid Seller?


A seller of goods is deemed to be an unpaid seller:

1. When the whole of the price has not been paid or tendered; or

2. When a bill of exchange or other negotiable instrument has been received as conditional payment and it has been dishonoured [Sec. 45(1)].


For an unpaid seller, the following conditions must be satisfied:

1. Whole of the price has not been paid, and

2. The amount is due, i.e., the seller has immediate cause of action, or conditional payment and the same has been satisfied.

3. A negotiable instrument, i.e., a cheque or a bill was received as conditional payment and the same has been dishonoured.


A seller who has obtained a decree for the price of the goods will also be an unpaid seller if the decree has not been satisfied.

The term ‘seller’ used in this chapter is very elastic. It includes any person who is in the position of a seller, as for example, an agent of the seller, to whom the bill of lading has been endorsed or a consigner or an agent who has himself paid or is directly responsible for tfye price.

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