Who is an unpaid seller?

 The seller is unpaid…..

When the whole has not been paid or tendered.


When a bill of exchange or other negotiable instruments have been received as a conditional payment the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.


These are the following circumstances when the Seller is unpaid….


Where he has not received the whole price. If a portion of the price was small that may remain unpaid.


When the buyer has given a bill of exchange for the price and it has been dishonoured.

In case of credit sales when the price becomes due.


It is noted that in case the buyer tenders the whole of the price and the seller wonderfully refuses to accept it, he remains no longer as unpaid seller.

The term ‘Seller’ also includes a person who is in position to exercise rights of unpaid seller, for instance, an agent of the seller is also considered a seller for the purpose of the section.



The sale of goods act provides certain kinds of rights to an unpaid seller


Right against the goods

Right against the buyer personally

Rights of unpaid seller against the goods

Where goods are sold without any stipulation as the credit

Where goods have been sold on credit but the term of credit has expired

Where the buyer has become insolvent. The seller can exercise the goods and hold the goods as the agent or bailor for the buyer. 



For example- Ram sells 50 tons of rice to Krishan on a credit of 3 months. Krishan requests Ram to keep the rice in his warehouse. 3 months expired and Krishan did not pay the price. Ram can exercise the right of lien. 


Do you know what is lien and part delivery


lien is where a seller has delivered a part of goods, he may exercise his lien reminder on the part of delivery was made in the circumstances to show an interaction

waive the lien.


Right of stoppage in transit 

This right is only applicable by the seller in following condition

The seller must be unpaid

He must have parted with the goods

The goods must be in transit

The buyer must have become insolvent

The right is subject to provision of the act


 Thankyou for reading 

With great respect 

Luv Sarpal