Contract of Sales of Goods

Transfer of title by nonowner and Unpaid Seller

• Sale by the mercantile agent: 
  • The term "mercantile agent" shall refer to a person who, in the ordinary course of his business, has the authorization to sell or buy goods, raise capital on the security of goods, consign goods for sale, or raise capital otherwise. The legitimate entity that has a right to the sale of goods is a merchant agent. When goods are sold by this agent, ownership is truly transferred.
• Sale by one of the co-owner:
  • The property in the goods is transferred to the person who buys them from such joint proprietors in good faith without knowledge of the fact that the seller has no permit or authority to sell if one of the numerous joint owners or proprietors of the goods has the sole dominion over them with the consent of the co-owners. It should be highlighted that without this acquisition, the buyer would have gotten simply the co-owners' titles and would have been just another co-owner with them. As a result, the clause violates the principle that "no one can give what they do not have."
• Sale by a person in possession of voidable contract: 
  • When a person sells things that they have obtained retention of under a void or voidable contract before the contract has been revoked, he or she gains a good title to those commodities as long as they are sold in good faith and without knowledge of the seller's infirmity in title.
• Sale of pledge goods:
  • If the debtors in a pledge agreement are unable to pay the loan on time, the pledge has the right to sell the pledged items in order to recoup his loss. Even after the pledge notifies the debtors that the agreed-upon period has passed, if the debtors don't express an interest in paying back the loan amount, the pledge may sell the pledged items on the open market to recoup his investment. In this situation, the sale is legitimate and the title transfer is real.
• Sale of goods under an agreement to sell:
  • In the case of a sale agreement, the transfer of title is legitimate if the seller sells the products to a different buyer than the one with whom the agreement was formed. However, the buyer with whom an agreement was signed is entitled to receive compensation and loss from the seller.
• Sell by the finder of goods:
  • If the item is perishable, its price is anticipated to drop significantly, or the finder's expenses equal more than one-third of the item's price, the finder has the right to sell the item. If the finder sells the items in this situation, the title transfer is valid.
• The title transfer is authentic if the unpaid seller sells the goods:
  • If the buyer does not express any desire in paying the price for the goods after the sale, the seller may sell the goods in an authentic manner.

Unpaid Seller

The seller of goods is deemed to be an unpaid seller, per section 45(1) of the Indian Sale of Goods Act, "when the whole amount of the price has not been paid or tendered," and "when any negotiable instrument or bill of exchange (such as a check) has been acquired as conditional payment, and it has been dishonored."

An unpaid seller is a person who sells items when the full amount of the purchase price has not been paid, presented, or when the condition on which any negotiable instrument or bill of exchange was acquired as conditional payment has not been satisfied due to the instrument's abasement. Such a seller is baptized to the remedies accommodated in the Act lien, a right of retention and if the buyer is insolvent (insolvency the right of stoppage in transit.

Rights Of Unpaid Seller or Lien Of Unpaid Seller :-

He has the following crucial rights in relation to products.

• Right of Lien:
  • An unpaid seller has the right to hold the items in his possession until the price is resumed.
  • For instance, Mrs. Barsha charges Mrs. Aditi Rs. 10 lakh for the things. Mrs. Aditi makes a payment of 5 lakh and pledges to make the remaining 5 lakh payment in two months. On the goods, Mrs. Barsha has a right of lien.
• Right of Stopping:
  • A vendor who has not been paid has the right to discontinue providing products in exchange if the customer goes into foreclosure.
  • For instance, Puja sells Poonam 100 cotton bales, but the delivery would take place in two parts. Puja initially delivers 50 bales. He learns later that Poonam has run out of money. Deliveries of bales in transit may be halted by puja.
• Right of Resale:
  • Until the buyer pays the seller, the seller is regarded as the owner of the items. So, with a few restrictions, he has the right to sell his wares. For instance, Pooja gives Poonam a horse on credit. Poonam is unpaid. Pooja can sell to someone else.
• Delivery Rights:
  • Where the freehold in the products has not yet been transferred to the buyer, the unpaid seller has the right to prevent delivery of the items.
• Right of Claim:
  • The unpaid seller also has the right to claim the purchaser for the prices of goods.
  • Suit For Price:
    • The vendor may bring legal action to recover the payment if the buyer refuses to pay after the items have been delivered. For instance, "Sanjay" charges "Kshitiz" Rs. 5 lakh for the goods. "Kshitiz" is averse to paying. Sanjay may file a claim for the cost.
  • Suit for Damages For NonAcceptance:
    • ​​​​​​​The seller has the ability to sue the buyer for spoiling non-acceptance if the buyer declines to purchase and pay for the goods. He cannot get the full amount back; only damages.
  • Suit for Interest & Special Damages:
    • ​​​​​​​The unpaid seller is entitled to reasonable interest on the unpaid cost of the items sold as compensation. In cases when both parties were aware of the loss at the time of the transaction, the seller may also bring legal action against the buyer for specific harm.

Duties of Unpaid Seller or Lien Of Unpaid Seller :-

• Make the necessary adjustments to reflect the buyer acquiring ownership of the goods.
• Find the items and match them to the purchase agreement.
• Transfer the buyer's title to the items in full and effective force.
• Deliver the goods in accordance with the contract's conditions.
• Ensure that the provided goods adhere to any implied or explicit conditions and warranties.
• Put the goods in a deliverable condition and deliver them as and when the buyer requests.
• Deliver the goods at the agreed-upon time or at the agreed-upon reasonable time and hour.
• Pay all costs associated with and related to making a transfer ( i.e. up to the stage of putting the goods into a deliverable time as per agreement).
• Deliver the goods in the predetermined amount.
• When the items are being shipped by sea, notify the buyer in advance so that he can get them guaranteed or insured.
• Make plans for the items' insurance while they are in the carrier's care or transportation.

Reference:

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