Sale of Goods Act Section 47 — Seller’s lien

CHAPTER V RIGHTS OF UNPAID SELLER AGAINST THE GOODS — Unpaid seller’s lien

Commercial / Corporate

Summary

Sub-section (1) sets out the general rule that an unpaid seller who still has the goods in their possession can hold on to them until the buyer pays or offers to pay the price, but only in the situations listed. This right applies subject to the rest of the Act.

Under clause (a) of sub-section (1), the seller can retain the goods if they were sold without any agreement for credit, meaning payment was expected immediately.

Under clause (b) of sub-section (1), if the goods were sold on credit, the seller can retain them once the credit period has ended and the buyer still has not paid.

Under clause (c) of sub-section (1), the seller can retain the goods if the buyer becomes insolvent, regardless of any credit terms.

Sub-section (2) clarifies that the seller can still use this right of lien even if they are holding the goods not as the owner but as an agent or bailee for the buyer.

Official Text

(1) Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:—

(a) where the goods have been sold without any stipulation as to credit;

(b) where the goods have been sold on credit, but the term of credit has expired;

(c) where the buyer becomes insolvent.

(2) The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer.