The rights of the unpaid seller. Lien

a. A lien is the right to retain possession of goods (but not to resell them) until the contract price has been paid.

b. The unpaid seller's lien is for the price only. When the price is tendered it does not enable him to retain possession for any other purpose, for example to recover the cost of storing the goods during the exercise of the lien.

Stoppage in Transit

a. After the seller has parted with the possession of the goods to a carrier for transmission to the buyer he can stop the goods and retake possession on the buyer becoming insolvent (i.e. if the buyer is unable to pay his debts as they fall due).

b. The period of transit operates from the time when the goods are handed to the carrier until the time when the buyer takes delivery of them. Transit is also terminated if:

i. The buyer obtains delivery before the arrival of the goods at the agreed destination, for example because the carrier hands them to the buyer’s agent during transit; or

ii. If, on reaching the agreed destination, the carrier acknowledges to the buyer that he is holding the goods to the buyer’s order; or

iii. If the carrier wrongfully refuses to deliver the goods to the buyer.

Resale of Goods

The general rule is that lien and stoppage in transit do not give the unpaid seller right to re-sell the goods. The exceptions are:

a. Where they are of a perishable nature; or

b. Where the buyer, after being given notice by the seller that he intends to resell, does not pay for them within a reasonable time; or

c. Where the seller has expressly reserved the right to resell if the buyer defaults in payment.

Repossession of Goods

a. If the seller has reserved title to the goods until the contract price, or any other debt owing to him by the buyer is paid, then he may re-possess the goods if the buyer, being a company, goes into liquidation or receivership.

b. The right to re-possess from a buyer who is a private individual would arise:

i. If he were adjudged bankrupt, or

ii. If it were intimated in some other way that the goods would not be paid for.

Remedies Against the Buyer

The above remedies are all enforced against the goods. The remedies against the buyer are:

a. An action for the contract price, provided the property in the goods has passed to the buyer.

b. An action for non-acceptance. In an action for damages for non-acceptance, where there is an available market the measure of damages is the difference between the contract price and the market price on the date fixed for acceptance, or if no date was fixed, at the time of refusal to accept.

The remedies of the buyer

The buyer may:

a. Sue for non-delivery. In an action for damages for non-delivery, where there is an available market the measure of damages is the difference between the contract price and the market price on the date fixed for delivery, or if no date was fixed, at the time of refusal to deliver.

b. Sue to recover any money paid to the seller.

c. Repudiate the contract for breach of a condition by the seller, unless he has waived the breach, and elected to treat it as a breach of warranty or the contract is non-severable and he has accepted the goods or part of them.

d. In respect of a breach of warranty set up the loss in diminution of the price, or sue for damages.

e. Sue for specific performance. This equitable remedy is at the discretion of the court and will not normally be granted when damages are an adequate remedy. The goods will need to be specific and not readily available elsewhere in the market. The remedy is appropriate for goods which have a special value or which are unique, for example a classic car or a painting.

Ex. 1. Fill in the gaps in passages A and B with the correct words from the boxes. Change grammar forms where necessary.

A.

legal process, receipt, Act of God, Bill of Lading, to reserve the right, destination, fault, document of title, contract of affreightment, to impose, to carry goods, charter party, to be liable for, shipowner, insurer, inherent vice, vessel, negligence