A seller becomes unpaid seller when he/ she fails to get the whole payment from the buyer in time or when the bank dishonors the negotiable instrument received by him for payment.
Rights of an Unpaid Seller Against the Buyer Personally
- Right to Sue for the Price:
The seller can take the buyer to court to get the payment for the goods if the buyer refuses to pay. - Right to Sue for Damages:
If the buyer does not accept or pay for the goods, the seller can claim money for the loss they suffered because of this. - Right to Cancel the Contract (Anticipatory Breach):
If the buyer tells the seller in advance that they will not pay or accept the goods, the seller can cancel the contract and claim damages. - Right to Interest:
If the buyer delays payment, the seller can ask for extra money as interest on the unpaid amount. - Right to Claim Special Losses:
If the buyer’s refusal to pay causes the seller additional costs (like storage or transport), the seller can ask for that money too.
Rights of an Unpaid Seller Against the Goods
- Right to Hold the Goods (Lien):
The seller can keep the goods and not deliver them until the buyer pays. - Right to Stop Goods in Transit:
If the goods are being delivered and the buyer refuses to pay, the seller can stop the delivery and take back the goods. - Right to Resell the Goods:
If the buyer does not pay, the seller can sell the goods to someone else. - Right to Refuse Delivery:
The seller can refuse to deliver the goods if the buyer has broken the contract or is unable to pay.
These rights help the unpaid seller protect themselves and recover their money or goods. A seller becomes unpaid seller when he/ she fails to get the whole payment from the buyer in time or when the bank dishonors the negotiable instrument received by him for payment.