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CAIIB Paper 4 BRBL Module D Unit 9 : Unpaid Seller (New Syllabus)
IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Paper 4 (BANKING REGULATIONS AND BUSINESS LAWS) includes an important topic called “Unpaid Seller”. Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.
In this article, we are going to cover all the necessary details of CAIIB Paper 4 (BRBL) Module D (COMMERCIAL & OTHER LAWS WITH REFERENCE TO BANKING OPERATIONS) Unit 9 : Unpaid Seller, Aspirants must go through this article to better understand the topic, Unpaid Seller and practice using our Online Mock Test Series to strengthen their knowledge of Unpaid Seller. Unit 9 : Unpaid Seller
The seller of goods is deemed to be an ‘unpaid seller’(Sec. 45 of Sale of Goods Act, 1930)
- When the whole of the price has not been paid or tendered;
- When the payment for the goods is received in the form of a cheque or other negotiable instrument and the same is dishonoured for financial or other reasons.
Here, the term ‘seller’ includes any person who is in the position of a seller, e.g., an agent of the seller, to whom the bill of lading has been endorsed, or a consignor or agent who has paid for goods to the seller.
Rights Of An Unpaid Seller (Sec. 46)
Unpaid seller’s rights against the goods
- Lien on the goods for the price while he is in possession of them.
- In case of insolvency of the buyer, a right of stopping the goods in transit after he has parted with the possession of them.
- A right of resale. If the property in goods has not passed to the buyer, the unpaid seller also has a right of withholding delivery of the goods.
If the property in goods has not passed to the buyer, the unpaid seller also has a right of withholding delivery of the goods.
Unpaid seller’s lien (Sec. 47)
The unpaid seller of goods (who is in possession of them), is entitled to retain possession of them until payment of the price is made in the following cases:
- if the goods have been sold without any stipulation as to credit;
- if the goods have been sold on credit, but the term of credit has expired
- if the buyer becomes insolvent.
Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on the balance goods, unless he makes part delivery under circumstances to show that he would waive the right to lien on all goods.
Termination of lien:
The unpaid seller of goods loses his lien thereon:
- When he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods
- When the buyer or his agent lawfully obtains possession of the goods
- By waiver of lien.
Right of stoppage in transit:
- When the buyer becomes insolvent, the unpaid seller who has parted with the possession of the goods has the right of stopping them in transit. He may retain them until payment of the price.
Duration of transit:
- Goods are deemed to be in course of transit from the time when they are delivered to a carrier or other bailee for the purpose of transmission to the buyer and the transit ends, when the buyer or his agent takes delivery of them from such carrier or other bailee.
- The unpaid seller may exercise his right of stoppage in transit either by taking actual possession of the goods, or by giving notice of his claim to the carrier or other bailee in whose possession the goods are.
Effect of sub-sale or pledge by buyer (Sec. 53)
- The unpaid seller’s right of lien or stoppage in transit is not affected by a further sale or by other disposition of the goods, which the buyer may have made Exception to this is when any person in good faith and for consideration takes documents of title to goods from a buyer; or transfer of goods is by way of pledge, where right of unpaid seller may get defeated.
- If the goods are of a perishable nature, or if the unpaid seller, who has exercised his right of lien or stoppage in transit gives notice to the buyer of his intention to re-sell, the unpaid seller may, if the buyer does not within a reasonable time pay the price, resell the goods.
- He can also recover from the original buyer, damages for any loss occasioned by his breach of contract. The buyer is not entitled to any profit which may occur on the resale.
- If the unpaid seller does not give a prior notice of sale to the buyer, then the unpaid seller is not entitled to recover damages from the buyer. On the contrary, the buyer becomes entitled to the profit on a resale.
- If the unpaid seller who has exercised his right of lien or stoppage in transit re-sells the goods, the, ‘new’ buyer acquires a good title to the goods as against the original buyer, even if no notice of the resale was given to the original buyer.
Unpaid seller’s rights against the buyer personally:
- These rights arise out of breach of contract and the seller can file a suit to claim damages, claim the price of goods with interest and he can also repudiate the contract.