Ans.
Right of Lien [Secs. 47-49]
The ‘unpaid seller’ has a lien on the goods for the price
while he is in possession, until the payment or tender of the price. A lien is
a right to retain possession of goods until payment of the price is entitled to
lien in the following three cases, namely;
(i) where goods have been sold without any stipulation as
to credit, i.e. cash sale.
(ii) where goods have been sold on credit but the term of
credit has expired; or
(iii) where the buyer becomes insolvent.
Rules:
1. The seller may exercise his right of lien
notwithstanding that he is in possession of the goods as agent or bailee for
the buyer.
2. If the goods have been sold on credit, the seller
cannot refuse to part with possession unless the term of credit has expired.
3. Lien can be exercised for non-payment of the price,
not for any other charges.
4. Effect of part delivery (Sec. 48): When an unpaid
seller has made a part delivery of the goods he can exercise lien on the
balance of the goods not delivered unless the part delivery was made under such
circumstances as to show an intention to waive the lien.
5. The seller can abandon or waive the lien if he so
desires.
6. Termination of lien (Sec. 49): If possession is lost,
lien is lost. The unpaid seller of goods loses his lien thereon in the
following cases:
(a) When he delivers the goods to a carrier or other
bailee for the purpose of transmission to the buyer without reserving the right
of disposal of the goods;
(b) when the buyer or his agent lawfully obtains
possession of the goods; and
(c) where the seller has waived the right of lien. The
unpaid seller does not lose his lien by reason only that he has obtained a
decree for the price of the goods.
7. Sale not rescinded by lien (Sec. 54): A contract of
sale is not rescinded by the mere exercise of the right of lien. The contract
still remains live and the buyer can claim delivery of the goods by tendering
the price. However, if the buyer defaults, the sellers remedy is to resell the
goods and claim damages.
