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Sale of Goods

Rights Against The Goods

a) Where the property in the goods has passed to the buyer.

  1. 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.

  1. 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.

  1. 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 --

  1. When the goods are of perishable nature, without giving any notice to the buyer, of the resale.
  2. 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
  3. Where the seller has expressly reserved the right of resale in the contract. No notice to the buyer is required in that case.

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