Sale of Goods Act Section 45 — “Unpaid seller” defined
CHAPTER V RIGHTS OF UNPAID SELLER AGAINST THE GOODS
Commercial / Corporate
Summary
Sub-section (1) explains when a seller is considered an “unpaid seller.” This happens in two situations. First, when the full price of the goods has not been paid or offered to be paid. Second, when the seller accepted a bill of exchange or other negotiable instrument (like a cheque) as conditional payment, and that condition was not met because the instrument was dishonoured (for example, bounced) or for any other reason.
Under clause (a) of sub-section (1), the seller is unpaid if the entire price has not been paid or tendered. This means even if a part of the price has been paid, the seller still counts as unpaid as long as the whole amount is not settled or offered.
Under clause (b) of sub-section (1), the seller is unpaid if they received a bill of exchange or other negotiable instrument as a conditional form of payment, and the condition was not fulfilled. This typically happens when the instrument is dishonoured, but the wording also covers any other situation where the condition fails.
Sub-section (2) clarifies that the term “seller” in this chapter is broader than just the original seller. It includes anyone who stands in the position of a seller. For example, an agent of the seller to whom the bill of lading has been endorsed, or a consignor or agent who has personally paid the price or is directly responsible for it.
Official Text
(1) The seller of goods is deemed to be an “unpaid seller” within the meaning of this Act—
(a) when the whole of the price has not been paid or tendered;
(b) when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.
(2) In this Chapter, the term “seller” includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of lading has been endorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price.