01. Sale of Goods Act.docx

2 the negotiable instrument cheque bill of exchange

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2) The negotiable instrument (Cheque / Bill of Exchange / Promissory note.) tendered towards the sale consideration was dishonored on the due presentation. RIGHTS OF UNPAID SELLER’s Right Against When Right to the property RIGHT OF GOODS (1)Passed on to the Buyer a) Lien Lien is the right to retain the security, until the debt is discharged or a promise is performed. It is available to the unpaid seller in the following circumstances. i. The goods have been sold without any stipulation as to credit. ii. Where the goods have been sold on credit, the terms of credit have expired. iii. The buyer became insolvent b) stoppage of goods in Transit An unpaid seller can exercise this right subject to the following conditions. i. The property must have passed from the seller to buyer. ii. The seller must have parted with the possession of the goods, but the buyer must have not received them. iii. The seller must be unpaid. iv. The buyer must be insolvent The unpaid seller may exercise the right of stoppage of goods in transit in the following ways. 1. By taking physical possession of of the goods. 2.By issuing a notice of his claim to the carrier or other bailee, in whose possession goods are there. “Unpaid seller’s right of stoppage of goods in transit is not affected by sale or other wise disposition of goods by Buyer (Except where the goods are transferred by means of documents of title to goods.)” c) Re-sale An unpaid seller having the right of lien or right of stoppage of goods in transit can sell the goods, to a third party, in case payment is not forth coming. If a notice of sale is issued to the Buyer , the unpaid seller is entitled for (1) Retain the profit on sale if any (2) Recovery of loss on sale if any, from the buyer. If Notice of sale is not given to the buyer, the seller would forego the above two benefits. (2) Not passed on to the buyer With hold delivery An unpaid seller can withhold the delivery of goods ,when i. Possession of the goods is with him, and ii. The property has not been passed to the party.
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The unpaid seller can also invoke personal remedy against buyer. BUYER Personal remedy against the Buyer ( Owner ship & possession of goods passed on to buyer a) Sue for price Suit for the price of the goods sold. b) Sue for damages Where the buyer wrongfully neglects or refuses to accept and pay for goods, the seller may sue the buyer for damages for non- acceptance / non-payment. c) Sue for Interest Where the buyer wrongfully neglects or refuses to accept and pay for goods, on petition, the court may award interest on the price of goods from the date of sale of goods until he is paid.
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