CONDITIONS, WARRANTIES & RIGHTS OF CONDITIONS, WARRANTIES & RIGHTS OF AN UNPAID SELLERAN UNPAID SELLER

Submitted to:-

Pro. Shweta Bambuvala

Submitted by:-

Jigisha Dave ( NR10120)

A stipulation in a contract of sale with reference to goods which are the subject thereof maybe a condition or a warranty [ Sec 12 (1)]

A condition is a stipulation which is A condition is a stipulation which is essential to the main purpose of contract.essential to the main purpose of contract.

Its non-fulfillment upsets the very basis of Its non-fulfillment upsets the very basis of the contract.the contract.

A warranty is a stipulation which is A warranty is a stipulation which is collateral to the main purpose of the collateral to the main purpose of the contract.contract.

It is not of such vital importance as a It is not of such vital importance as a condition is.condition is.

Difference as to nature.Difference as to nature. Difference as to breach.Difference as to breach. Difference as to treatment.Difference as to treatment.

Voluntary waiver of condition.[ Sec. 13 Voluntary waiver of condition.[ Sec. 13 (1)](1)]

Acceptance of goods by buyer.[ Sec. Acceptance of goods by buyer.[ Sec. 13(2)]13(2)]

In contract of sale of goods conditions and In contract of sale of goods conditions and warranties may be express or implied.warranties may be express or implied.

Express conditions and warranties are Express conditions and warranties are those which are expressly provided in a those which are expressly provided in a contract.contract.

Implied conditions and warranties Implied conditions and warranties ( Sec. 14 to 17 )( Sec. 14 to 17 ) Express warranty or conditions is Express warranty or conditions is

inconsistent with the implied warranty or inconsistent with the implied warranty or conditions. [ Sec. 16 (4)].conditions. [ Sec. 16 (4)].

Conditions as to title [Sec. 14 (a)].Conditions as to title [Sec. 14 (a)]. Sales by description ( Sec. 15 ). Sales by description ( Sec. 15 ).

Sales by description as well as by sample.Sales by description as well as by sample. Condition as to quality or fitness [ Sec. 16 (1)].Condition as to quality or fitness [ Sec. 16 (1)]. Condition as to merchantability [ Sec. 16 (2)].Condition as to merchantability [ Sec. 16 (2)]. Condition implied by customs [ Sec. 16 (3)].Condition implied by customs [ Sec. 16 (3)]. Sale by sample ( Sec. 17 ).Sale by sample ( Sec. 17 ). Condition as to wholesomeness. Condition as to wholesomeness.

Warranty of quiet possession [ Sec. 14 Warranty of quiet possession [ Sec. 14 (b)].(b)].

Warranty of freedom from encumbrances Warranty of freedom from encumbrances

[ Sec. 14 (c)].[ Sec. 14 (c)]. Warranty as to quality or fitness by usage Warranty as to quality or fitness by usage

of trade [ Sec. 16 (4)].of trade [ Sec. 16 (4)]. Warranty to disclose dangerous nature of Warranty to disclose dangerous nature of

goods.goods.

This means ‘let the buyer beware’, that is This means ‘let the buyer beware’, that is , in a contract of sale of a goods he seller , in a contract of sale of a goods he seller is under no duty to reveal unflattering is under no duty to reveal unflattering truths about the goods sold.truths about the goods sold.

Implied conditions and warranties in a Implied conditions and warranties in a contract of sale may be negative or contract of sale may be negative or varied byvaried by

Express agreement between the parties.Express agreement between the parties. The course of dealing between them.The course of dealing between them. The custom or usage of trades.The custom or usage of trades.

RIGHTS OF AN UNPAID SELLERRIGHTS OF AN UNPAID SELLERCHAPTER VCHAPTER V

CONTENTSCONTENTS::

Understanding the meaning of an Unpaid sellerUnderstanding the meaning of an Unpaid seller

Unpaid seller’s Rights Against the GoodsUnpaid seller’s Rights Against the Goods

Unpaid seller’s Rights Against buyer personallyUnpaid seller’s Rights Against buyer personally

Understanding The Meaning Of An Understanding The Meaning Of An Unpaid SellerUnpaid Seller

U/Sec. 45U/Sec. 45

(1)The seller of goods is deemed to be an "unpaid (1)The seller of goods is deemed to be an "unpaid seller" when:seller" when:

(a) the whole of the price has not been paid or tendered;(a) the whole of the price has not been paid or tendered;

(b) a bill of exchange or any other negotiable instrument (b) a bill of exchange or any other negotiable instrument has been received as a conditional payment but which is has been received as a conditional payment but which is subsequently dishonoured.subsequently dishonoured.

(2)The term “seller” in this chapter include every (2)The term “seller” in this chapter include every person in the position of a seller.person in the position of a seller.

Unpaid Seller’s Rights Against The Unpaid Seller’s Rights Against The GoodsGoods U/Sec. 46 U/Sec. 46

(1)When the property in the goods has been (1)When the property in the goods has been transferred:transferred:

i) RIGHT OF LIEN: A lien is a right to retain possession of i) RIGHT OF LIEN: A lien is a right to retain possession of goods until payment of the price. Its available when;goods until payment of the price. Its available when;

a) Goods sold without any conditiona) Goods sold without any conditionb) Goods sold on credit but the period has expiredb) Goods sold on credit but the period has expiredc) The buyer becomes insolventc) The buyer becomes insolvent

ii) RIGHT OF STOPPAGE IN TRANSIT: It’s the right of stopping ii) RIGHT OF STOPPAGE IN TRANSIT: It’s the right of stopping the goods in transit after the unpaid seller has parted with the goods in transit after the unpaid seller has parted with the possession of the goods. It is possible when;the possession of the goods. It is possible when;

a) The buyer becomes insolvent; anda) The buyer becomes insolvent; andb) Goods are in transitb) Goods are in transit

iii) RIGHT OF RE-SALE: The unpaid seller can re-sell the goods.iii) RIGHT OF RE-SALE: The unpaid seller can re-sell the goods. when; when;

a) Goods are Of a perishable in nature;a) Goods are Of a perishable in nature;

b) Notice provided to the buyer for the intention of b) Notice provided to the buyer for the intention of resellresell

but he isn’t paying within a reasonable time; but he isn’t paying within a reasonable time;c) Expressly reserves the right of resale.c) Expressly reserves the right of resale.

(2)When the property in the goods has not been (2)When the property in the goods has not been transferred:transferred:

i) RIGHT OF WITHHOLDING DELIVERY: When the goods are not i) RIGHT OF WITHHOLDING DELIVERY: When the goods are not passed to buyer, the seller can’t acquire the ‘rights of lien’ but passed to buyer, the seller can’t acquire the ‘rights of lien’ but

gets a right of withholding the delivery of goods.gets a right of withholding the delivery of goods.

Unpaid seller’s Rights Against buyer Unpaid seller’s Rights Against buyer personallypersonally

*Right to sue for price*Right to sue for price

*Right to sue for damages*Right to sue for damages

*Rights to repudiation of contract*Rights to repudiation of contract

*Right to sue for interest*Right to sue for interest

RemediesRemedies for breach of contract for breach of contract of saleof sale

1. Seller’s suits1. Seller’s suits i) Suit for price (Sec. 55)i) Suit for price (Sec. 55) ii) Suit for damages for non-acceptance of the goods (Sec. 56)ii) Suit for damages for non-acceptance of the goods (Sec. 56) iii) Suit for damages for repudiation of contract by the buyer iii) Suit for damages for repudiation of contract by the buyer

before due date (Sec. 60)before due date (Sec. 60) iv) Suit for interest [Sec. 61 (2)(a)]iv) Suit for interest [Sec. 61 (2)(a)]

2. Buyer’s suits2. Buyer’s suits i) Suit for damages for non-delivery of goods (Sec. 57)i) Suit for damages for non-delivery of goods (Sec. 57) ii) Suit for specific performance (Sec. 58)ii) Suit for specific performance (Sec. 58) iii) Suit for breach of warrenty(Sec.59)iii) Suit for breach of warrenty(Sec.59) iv) Suit for damages for repudiation of contract by the seller iv) Suit for damages for repudiation of contract by the seller

before due date (Sec. 60)before due date (Sec. 60) v) Suit for interest [Sec. 61 (2)(b)]v) Suit for interest [Sec. 61 (2)(b)]

Case StudyCase Study

Indian steel and Wire Production LtdIndian steel and Wire Production Ltd (Appellant)(Appellant)

Vs Vs

State of Madras State of Madras (Responded)(Responded)

AIR 1968 SC 478AIR 1968 SC 478

THANK YOUTHANK YOU