1. 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 --
      • The goods have been sold without any stipulation s to credit;
      • The goods have been sold on credit, but the term of credit has expired or
      • 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.

2. 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.

3. 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--

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

2. Where the property in the goods has not passed to the buyer

Right of with holding Delivery -- Where the property in the goods has not passed to the buyer, the unpaid seller has the right to withhold delivery of the goods, which is similar to and co-extensive with his rights of lien and stoppage in transit which he would have had if the property had passed.     

Rights Against the Buyer Personally (Seller's Remedies Against buyer for Breach of Contract)-- Besides, the above rights against the goods, an unpaid seller has certain rights against the buyer personally. The seller enjoys the following rights in personam (also known as remedies for breach of contract).

1. Suit for Price -- When the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay the price, the seller is entitled to sue him for the price.

Where under a contract of sale the price is payable on a certain day irrespective of delivery or passing of property, and the buyer refuses or neglects to pay on that day, the seller may sue him for the price.

2. Suit for Damages for Non-Acceptance -- Where the buyer wrongfully neglects or refuses to pay for the goods, the seller may sue him for damages for non-acceptance.
3. Suit for Damages for Repudiation of contract before date of delivery Where the buyer repudiates the contract before the date of delivery, the seller may adopt any of the following two courses of action, viz.-
   • The seller may treat the contact as rescinded and sue the buyer for damages. This is also known as 'damages for anticipatory breach'. The damages will be assessed according to the prices prevailing on the date of breach.
   • The seller may treat the contract as subsisting and wait till the date of delivery. The contract remains open at the risk and for the benefit of both the parties. If the buyer subsequently chooses to perform there shall be no damages; otherwise he shall be liable to damages assessed according to the prices on the day stipulated for delivery.
4. Suit for Interest --The seller may recover interest or special damages whereby law interest or special damages may be recoverable.