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Rights & Liabilities of a Buyer and Seller, and Rights of an Unpaid Seller

1. Rights and Liabilities of a Seller

The seller's rights and liabilities are defined under the Sale of Goods Act, 1930 and depend on whether the goods have been delivered or payment has been made.

Rights of a Seller

  1. Before Delivery of Goods:

    • Right to Receive Payment: The seller has the right to receive payment as per the terms of the contract.
    • Right to Retain Possession (Section 46):
      • If the buyer fails to pay, the seller can retain possession of the goods.

  2. After Delivery of Goods:

    • Right to Sue for Price (Section 55):
      • If the goods have been delivered and the buyer refuses to pay, the seller can sue for the price.
    • Right to Sue for Damages (Section 56):
      • If the buyer wrongfully refuses to accept the goods, the seller can claim damages for breach of contract.

  3. Right of Lien (Section 47):

    • If the seller is in possession of the goods, they can retain possession until the buyer pays for them.

  4. Right to Stop Goods in Transit (Section 50):

    • If the buyer becomes insolvent, the seller can stop the goods while they are in transit.

  5. Right to Resale (Section 54):

    • The seller can resell the goods if the buyer defaults or breaches the contract.

Liabilities of a Seller

  1. Delivery of Goods:

    • The seller must deliver the goods as per the contract terms (Section 31).

  2. Delivery on Time:

    • The goods must be delivered within the stipulated time or a reasonable time if no period is specified.

  3. Goods Must Conform to the Contract:

    • The goods delivered must match the description, quality, and quantity agreed upon in the contract.

2. Rights and Liabilities of a Buyer

The buyer’s rights and liabilities depend on their obligations under the contract and the seller’s performance.

Rights of a Buyer

  1. Right to Receive Delivery:

    • The buyer has the right to receive the goods as per the terms of the contract (Section 31).

  2. Right to Reject Goods (Section 37):

    • If the goods do not match the description, quality, or quantity agreed upon, the buyer can reject them.

  3. Right to Examine the Goods (Section 41):

    • The buyer has the right to inspect the goods to ensure they conform to the contract before accepting them.

  4. Right to Sue for Damages (Section 57):

    • If the seller fails to deliver the goods, the buyer can sue for damages.

  5. Right to Specific Performance (Section 58):

    • The buyer can apply to the court to compel the seller to perform the contract.

  6. Right to Repudiate the Contract:

    • If the seller breaches a condition, the buyer can repudiate the contract.

Liabilities of a Buyer

  1. Payment of Price:

    • The buyer is bound to pay the agreed price for the goods (Section 31).

  2. Acceptance of Delivery:

    • The buyer must accept the goods delivered as per the contract terms.

  3. Inspection of Goods:

    • The buyer must inspect the goods within a reasonable time and notify the seller of any defects.

3. Rights of an Unpaid Seller

An Unpaid Seller is defined under Section 45 as:

"A seller of goods is deemed to be unpaid when the whole price has not been paid or when a negotiable instrument given as payment has been dishonored."

Rights of an Unpaid Seller Against the Goods

  1. Right of Lien (Section 47):

    • The unpaid seller can retain possession of the goods until payment is made.
    • Applicable if the seller still possesses the goods.

  2. Right of Stoppage in Transit (Section 50):

    • If the buyer becomes insolvent, the unpaid seller can stop the goods while they are in transit and regain possession.

  3. Right of Resale (Section 54):

    • The seller can resell the goods if:
      • The goods are perishable.
      • Reasonable notice has been given to the buyer.

  4. Right to Withhold Delivery:

    • The unpaid seller can refuse to deliver the goods if the buyer has not made payment.

Rights of an Unpaid Seller Against the Buyer

  1. Right to Sue for Price (Section 55):

    • The unpaid seller can sue the buyer for the price of goods if ownership has already been transferred.

  2. Right to Sue for Damages (Section 56):

    • If the buyer refuses to accept the goods or breaches the contract, the seller can sue for damages.

  3. Right to Repudiate the Contract:

    • If the buyer fails to pay, the seller can repudiate the contract.

Summary Table

AspectSeller's RightsBuyer's RightsUnpaid Seller’s Rights
Before DeliveryRetain possession, sue for damages.Receive delivery as per contract.Right of lien, right to stop transit.
After DeliverySue for price, resell goods.Reject goods, sue for damages.Right to resell, withhold delivery.
Breach of ContractSue for damages, repudiate contract.Sue for damages, seek specific performance.Sue for price, claim damages.

Conclusion:
The rights and liabilities of the buyer, seller, and unpaid seller under the Sale of Goods Act, 1930, are designed to ensure fairness in commercial transactions. They define the remedies available in case of a breach and protect both parties' interests.

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