Sale of Goods
Rights Against The Goods
a) Where the property in the goods has passed to the buyer.
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Right of Lien-- 'Lien is the
right to retain possession of goods until certain charges in respect thereof
are paid. An unpaid seller who is in possession of the goods is entitled to
retain them until payment of the price, where --
a) The goods have been sold without any stipulation s to credit;
b) The goods have been sold on credit, but the term of credit has expired or
c) The buyer becomes insolvent.
Where the goods have been sold on credit, the right of lien
shall remain suspended over the period of credit and shall revive on the expiry
of that period.
The right of lien is linked with possession of the goods and
not with the title. It is not affected even if the seller has transferred the
documents of title till he remains in possession of the goods. However, if the
buyer has further transferred the documents of title to a bona fide purchaser
the seller's lien is defeated.
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Right of Stoppage in transit --The right of
stoppage of goods in transit, arises to an unpaid seller after he has
parted with the possession of the goods. The seller has the right to
resume possession of the goods while they are in the course of transit and
to retain them until payment or tender of the price.
The right of stoppage in transit is available to an unpaid
seller, when the buyer becomes insolvent and the goods are in transit.
The buyer is said to be 'insolvent' when he has ceased to pay
his debts in the ordinary course of business, or cannot pay his debts as they
becomes due whether he has committed an act of insolvency or not.
- Right of Resale -- The rights of lien and
stoppage in transit, would not have been of much
value if he seller had no right to resell the goods, because the seller
cannot continue to hold the goods indefinitely. Section 54 provides an
unpaid seller with a limited right to resell the goods.
An unpaid seller may resell the goods --
- When the goods are of perishable nature, without giving any notice to the buyer, of the resale.
- In case of other goods, when after giving a notice to the buyer of his intention to resell the goods, the buyer does not pay the price within a reasonable time; and
- Where the seller has expressly reserved the right of resale in the contract. No notice to the buyer is required in that case.
