Who is unpaid seller and what are its rights?


Section 45 lays down that a seller is unpaid :

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

(2) When a negotiable instrument or a bill of exchange has been received as conditional payment and the condition in which it was received has not been fulfilled by reason of the dishonor of the instrument or otherwise.


The seller remains as unpaid seller as long as any portion of the price, however small, remain unpaid. Where the whole of price has been tendered, and the seller refused to accept such a tender, seller ceases to be an unpaid seller. In such a case the seller loses all high right against the goods.

If there is a period of credit then the seller is not unpaid until the price become due. Against if there is a condition attached to payment it must be fulfilled.

The unpaid seller’s right can be exercised by an agent of the seller to whom the bill of leading has been endorsed, or a consignor or an agent who has himself paid, or is directly responsible for the price.

Rights of an unpaid seller

The sale of Goods Act has expressly given two kinds of right to an unpaid seller of goods, namely :

(1) Against the goods


(a) When property in the goods has passed

(i) Right of lines

(ii) Right of stoppage of goods in transit

(iii) Right of re-sale


(b) When property in the goods has not passed

(i)Right of withholding delivery.

(2) Against the buyer personally

(i) Right to use for price

(ii) Right to sue for damages


(iii)Right to sue for interest.


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