Unpaid Seller
Unpaid Seller
Definition:
In a transaction of sale it is not possible to avoid credit sales. In credit sales there is a risk of a debtor not paying the price of the goods even after the credit period is over. The seller of the goods therefore must possess some rights which he can use to secure payment of the price. If the recovery of the price is not possible due to the reason of bankruptcy of the buyer, he must have some other remedies. The Sale of Goods Act has made elaborate provisions regarding the rights of an unpaid seller.
The term 'unpaid seller' may be defined as the seller to whom the full price of the goods sold has not been paid. The legal definition of 'unpaid seller' is given in Section 45 of the Sale of Goods Act, as under:
"The seller of the goods is deemed to be an unpaid seller within the meaning of this Act:
(a) When the whole of the price has not been paid or tendered;
(b) When a bill of exchange or other negotiable instrument has been received as conditional payment and the condition on which it was received has not been fulfilled by reason of the dishonor of the instrument or otherwise."
Features of the unpaid seller
1. He must sell goods on the cash basis and must be unpaid. 2. If he sells on credit basis, he is not an unpaid seller during the period of credit. 3. The term of credit has expired and the price has not been paid to him. 4. He must be unpaid wholly or partially. If a part of price remains unpaid, he is unpaid. 5. When the price is paid in the form of negotiable instruments and it has been dishonored. 6. If buyer offers payment and seller refuses to accept, the seller is not an unpaid seller. 7. Party A sells a car on cash basis to party B and the price has not been received yet.. 8. A sells good to B on 5 months credit period and B turns insolvent after 2 months. 9. A sells TV set to B on the same day cheque basis, the cheque is dishonored due to insufficient.
SALE OF GOODS ACT
Definition:
In a transaction of sale it is not possible to avoid credit sales. In credit sales there is a risk of a debtor not paying the price of the goods even after the credit period is over. The seller of the goods therefore must possess some rights which he can use to secure payment of the price. If the recovery of the price is not possible due to the reason of bankruptcy of the buyer, he must have some other remedies. The Sale of Goods Act has made elaborate provisions regarding the rights of an unpaid seller.
The term 'unpaid seller' may be defined as the seller to whom the full price of the goods sold has not been paid. The legal definition of 'unpaid seller' is given in Section 45 of the Sale of Goods Act, as under:
"The seller of the goods is deemed to be an unpaid seller within the meaning of this Act:
(a) When the whole of the price has not been paid or tendered;
(b) When a bill of exchange or other negotiable instrument has been received as conditional payment and the condition on which it was received has not been fulfilled by reason of the dishonor of the instrument or otherwise."
Features of the unpaid seller
1. He must sell goods on the cash basis and must be unpaid. 2. If he sells on credit basis, he is not an unpaid seller during the period of credit. 3. The term of credit has expired and the price has not been paid to him. 4. He must be unpaid wholly or partially. If a part of price remains unpaid, he is unpaid. 5. When the price is paid in the form of negotiable instruments and it has been dishonored. 6. If buyer offers payment and seller refuses to accept, the seller is not an unpaid seller. 7. Party A sells a car on cash basis to party B and the price has not been received yet.. 8. A sells good to B on 5 months credit period and B turns insolvent after 2 months. 9. A sells TV set to B on the same day cheque basis, the cheque is dishonored due to insufficient.
SALE OF GOODS ACT