An unpaid seller refers to a seller who has not yet received payment for the goods they have sold to the buyer. In other words, it's a seller who has delivered goods to the buyer but has not been paid for them. The rights of an unpaid seller are typically outlined in various legal frameworks such as the Sale of Goods Act or Uniform Commercial Code, and they include:
1. Right to Lien: An unpaid seller has the right to retain possession of the goods sold until payment or tender of payment is made by the buyer. This right allows the seller to withhold delivery of the goods as security for the unpaid purchase price.
2. Right of Stoppage-in-Transit: If the seller becomes aware that the buyer has become insolvent or unable to pay for the goods, the unpaid seller has the right to stop the goods while they are in transit to the buyer. This right allows the seller to reclaim possession of the goods and prevent them from being delivered to the insolvent buyer.
3. Right of Resale: If the goods are perishable in nature or if the seller has given the buyer notice of their intention to resell, an unpaid seller has the right to resell the goods and recover any losses incurred due to the buyer's default. The seller must act in good faith and conduct the resale in a commercially reasonable manner.
4. Right to Sue for Damages: An unpaid seller has the right to sue the buyer for the purchase price of the goods if the buyer refuses or fails to pay for them. The seller may also claim damages for any losses suffered as a result of the buyer's breach of contract, such as loss of profit or expenses incurred.
5. Right to Sue for Price: In addition to claiming damages, an unpaid seller may choose to sue the buyer specifically for the unpaid purchase price of the goods. This right allows the seller to seek a court order compelling the buyer to pay the outstanding amount owed for the goods delivered.
These rights are designed to protect the interests of the unpaid seller and provide them with recourse in the event of non-payment or default by the buyer. They enable the seller to recover the value of the goods sold and mitigate losses resulting from the buyer's failure to fulfill their payment obligations.
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