Rights of an Unpaid Seller I. (a). Rights of an Unpaid Seller against the Goods (i) Where the Property in the Goods has Passed to the Buyer a. Right of Lien: An unpaid seller has a right to retain the goods till he receives the price.
But to exercise this lien i. He must be in possession of goods ii. The goods must have been sold without any stipulation as to credit or where goods have been sold on credit, the terms of credit must have expired. He can also exercise the right of lien when the seller becomes insolvent.
iii. It must be remembered that the right of lien depends on actual possession. Thus where the seller has transferred to the buyer the documents of title to the goods, his lien is not affected so long as he continues to be in possession of the goods. For eg.‘A’ has sold the TV sets to ‘B’ and transferred the documents of title to the goods to ‘B’ by courier service.
But goods are under the custody of ‘A’ ready for despatching to booking office. Meantime, ‘B’ became insolvent. In this case, ‘A’ can retain the goods. Where an unpaid seller has made a part delivery of the goods, he has lien on the reminder.
However, if delivery of a part is intended as a delivery of the whole, then this lien is lost.