Rights Of Unpaid Seller Against The Buyer

by Umar Hafeez   |   1 Comments  |   175 Views    |   5/5 Rating   |   Print This Article
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Mar 28th, 2012
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In addition to his rights against the goods, as discussed above, an unpaid seller has the following rights against the buyer personally;

1. Suit or Price (Sec. 55)
On transfer of the ownership of the goods to the buyer, he becomes bound to pay the prices to the seller. When he does not pay the price in terms of the contract, legal action can be taken against the buyer by the unpaid seller.
(a) Sec. 55 (1) stales, “Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods.”
(b) Sec. 55 (2) states, “Where under a contract of sale the price is payable on a certain day irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract.”

2. Suit for Damages or Non-acceptance (Sec. 56)
Sec. 56 states, “Where the buyer wrongfully neglects or refuses to accept and any for the goods, the seller may sue him for damages for non-acceptance”.
This section deals with general damages. As such, the seller can recover the estimated loss arising directly and naturally, in the course of events, from the buyer’s breach of the contract. Such damages are measured as per provisions contained in Sec. 73 of the Contract Act. They are:
(i) Where there is an available market for the goods in question, the difference between die contract price and the market price on the date of breach will be the measure of damages.
(ii) Where there is no such market, the measure will be the estimated loss directly or indirectly resulting in the ordinary course of events from such breach.
In the same way, when the seller is ready and requests the buyer to take the delivery of the goods and the buyer wrongfully neglects or refuses to take the delivery within a reasonable time, the seller is entitled to recover from the buyer:
(a) Any loss by the buyer’s neglect or refusal to the seller; and
(b) Reasonable charges for the care and custody of goods (Sec. 44).

3. Suit for Repudiation of the Contract before due Date (Sec. 60)
Sometimes, the buyer puts an end to the contract before the due date of delivery of goods. Sec. 60 states, “Where either party to a contract of sale repudiates the contract before the date of delivery, the other may either treat the contract as subsisting or wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the breach.” Thus the seller may (a) treat the contract as subsisting and wait till the date of delivery or (b) treat the contract as rescinded and sue the buyer for damages for breach.

4. Suit for Interest (Sec. 61)
Where there is a specific agreement between the parties as to interest on the price of the goods from the date on which the payment becomes due. The seller may recover such interest from the buyer. Further, Sec. 61(2) states, “In the absence of a contract to the contrary. the court may award interest at such rate, as it thinks fit, on the amount of price to the seller in a suit by him for the amount of the price, from the date of the tender of the goods or from the date on which the price was payable.

Article Source: http://www.informationbible.com/article-rights-of-unpaid-seller-against-the-buyer-181706.html

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• 1. Web Development Company
  Thanks a lot for the informative blog post. I really appreciate it.
  (6:56 am, 2012.03.28)

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