Are you curious to know what is unpaid seller? You have come to the right place as I am going to tell you everything about unpaid seller in a very simple explanation. Without further discussion let’s begin to know what is unpaid seller?
In the world of commerce and trade, transactions involve the exchange of goods and services for monetary consideration. However, there are instances when buyers fail to make the payment as agreed, resulting in a situation where the seller is left with unpaid dues. To protect the rights of sellers and ensure fair business practices, the concept of an “unpaid seller” comes into play. In this blog, we will explore the concept of an unpaid seller, their rights, and the legal remedies available to them in case of non-payment.
What Is Unpaid Seller?
An unpaid seller refers to a person or entity who has sold goods or provided services to a buyer but has not yet received the agreed-upon payment. The term applies to both sellers who have not received any payment and those who have received only partial payment for the goods or services delivered.
Rights Of An Unpaid Seller:
To safeguard the interests of sellers in cases of non-payment, the law grants several rights to unpaid sellers:
- Right to Retain Possession: If the buyer fails to make the payment, the unpaid seller has the right to retain possession of the goods until the full payment is received. This right is available even if the goods have been delivered to the buyer.
- Right of Lien: The unpaid seller can exercise the right of lien, which allows them to retain possession of the goods until payment is made. This right extends to any charges, such as storage costs, incurred by the seller while holding the goods.
- Right to Stoppage in Transit: If the goods are in transit to the buyer, the unpaid seller can stop the delivery and resume possession of the goods until payment is received. This right can be exercised if the buyer becomes insolvent before taking delivery of the goods.
- Right to Resale: In certain circumstances, if the buyer defaults on payment, the unpaid seller can resell the goods. If the resale results in a higher price, the seller can claim the difference from the original buyer. However, this right is subject to specific legal requirements and conditions.
Legal Remedies For Unpaid Sellers:
When faced with non-payment, unpaid sellers can seek legal remedies to recover their dues:
- Suit for Price: The unpaid seller can file a suit against the buyer for the outstanding price of the goods or services provided.
- Damages for Non-Acceptance: If the buyer refuses to accept the goods without a valid reason, the seller can claim damages for the loss suffered due to the buyer’s non-acceptance.
- Damages for Breach of Contract: If the buyer breaches the contract by not making the payment, the unpaid seller can claim damages for the losses incurred due to the breach.
The concept of an unpaid seller plays a crucial role in ensuring fair trade practices and protecting the rights of sellers in commercial transactions. By granting unpaid sellers specific rights and legal remedies in case of non-payment, the law seeks to maintain a balance between the interests of buyers and sellers. It is essential for sellers to be aware of their rights and the legal avenues available to them in case of non-payment, as these measures can help them recover dues and maintain the integrity of trade transactions. Moreover, adherence to ethical business practices and prompt payment are vital for fostering trust and long-term partnerships between buyers and sellers in the ever-evolving landscape of commerce.
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What Is The Meaning Of An Unpaid Seller?
A person who has sold goods to another person but has not been paid for the goods or been paid partially is called an unpaid seller . According to section 45 of Sale of goods act An unpaid seller is one who has been given a negotiable instrument like a bill of exchange that has been dishonoured.
What Is An Example Of An Unpaid Seller?
A seller who has not received the full price of the goods sold is termed as unpaid seller. EXAMPLES: X sells goods of Rs. 5,00,000 to Y on a credit of one month, but after expiry of one month he did not pay the price, here X is said to be unpaid seller.
What Are The Features Of An Unpaid Seller?
Features of an unpaid seller:
The seller must be unpaid either wholly or partly. The decided period of time has expired and the seller is still left unpaid. The seller must not refuse to accept the payment. The price is paid through a negotiable instrument i.e. bill of exchange, promissory note, cheque, etc.
What Is An Unpaid Seller Wikipedia?
Definition: The term ‘unpaid seller’ may be defined as the seller to whom the full price of the goods sold has not been paid.
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