Lecture 8. Seller’s remedies
- Important > last part of a problem question
Key topics
- Action for the price
- Damages
- Real remedies against the goods
- Retent ion of title clauses
Recommended reading
- Bradgate - Chapter 18
- Atiyah - Chapters 25 & 26
- Goode - Chapter 15
- Sealy & Hooley - Chapter 12
- Bridge - Chapters 15 & 10
Articles
- “Reservation of title – past present and future”: McCormack: Conveyancer and Property Lawyer: 1994
Mar/Apr 129-139
- “When goods sold become a new species” Hicks: J.B.L.
1993 485 - 490
The seller has two sets of remedies:
(a) personal remedies
for the price
for damages for non-acceptance
for damages for refusal of delivery
(b) real remedies
Lien/right of retention
Stoppage in transit
Right of resale
A. Personal remedies
(most important one) Action for the price (s. 49 SOGA)
(1) Where, under a contract of sale, the property in the goods has passed to the buyer and he wrongfully
neglects or refuses to pay for the goods according to the terms of the contract, the seller may
maintain an action against him for the price of the goods.
(2) Where, under a contract of sale, the price is payable on a day certain irrespective of delivery and the
buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price,
although the property in the goods has not passed and the goods have not been appropriated to the
contract.
- Conditions: which need to be fulfilled in order to for the seller to claim
The buyer has wrongfully refused or neglected to pay
The property has passed to the buyer or the price is payable on a day certain irrespective of
delivery
(passing is important as this signifies ownership and liability)
Damages for non-acceptance (s. 50 SOGA)
(1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may
maintain an action against him for damages for non-acceptance.
(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course
of events, from the buyer’s breach of contract
(3) Where there is an available market for the goods in question the measure of damages is prima facie
to be ascertained by the difference between the contract price and the market or current price at the
time or times when the goods ought to have been accepted or (if no time was fixed for acceptance) at
the time of the refusal to accept
, This creates an additional burden for the seller
Buyer’s liability for not taking delivery of goods
- S. 37 SOGA
(1) When the seller is ready and willing to deliver the goods, and requests the buyer to take delivery,
and the buyer does not within a reasonable time after such request take delivery of the goods, he
is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for
a reasonable charge for the care and custody of the goods
seller can claim compensation for refusal of delivery within a reasonable time (e.g. if
the goods have perished)
B. Real remedies (remedies against the goods)
Unpaid seller defined (s. 38(1) SOGA) – is required
(1) The seller of goods is an unpaid seller (…):
(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.
e.g.: unpaid seller: a seller who has received a check (bill of exchange) which is later
dishonoured
Meaning of “unpaid seller
- Benjamin considers that a seller will be “unpaid” if the whole of the price has not in fact been paid or
tendered despite the fact that payment may not yet be due under the contract, e.g. because the
seller has sold the goods on credit. Whilst the buyer remains solvent, the seller cannot exercise his
right of lien over the goods during the credit period. Once the buyer becomes insolvent, however, the
seller can exercise his right of lien if he still has possession of the goods, or stoppage in transit, if they
are in transit to the buyer. The fact that payment is not yet due does not prevent the exercise of
those remedies during the credit period once the buyer becomes insolvent
Unpaid seller’s rights (s. 39 SOGA)
(1) Subject to this and any other Act, notwithstanding that the property in the goods may have passed to
the buyer, the unpaid seller of goods, as such, has by implication of law—
(a) a lien on the goods or right to retain them for the price while he is in possession of them;
(b) in case of the insolvency of the buyer, a right of stopping the goods in transit after he has
parted with the possession of them;
(c) a right of re-sale as limited by this Act.
(2) Where the property in goods has not passed to the buyer, the unpaid seller has (in addition to his
other remedies) a right of withholding delivery similar to and co-extensive with his rights of lien or
retention and stoppage in transit where the property has passed to the buyer.
Overall, seller must be in the possession of good, unpaid
Lien/right of retention (41, 43, 47(2) SOGA)
- Unpaid seller’s lien: s. 41
(1) Subject to 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:—
(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 lien or right of retention notwithstanding that he is in possession
of the goods as agent or bailee or custodier for the buyer.
- Meaning of “insolvent”: section 61(4) SOGA
A person is deemed to be insolvent within the meaning of this Act if he has either ceased to pay his
debts in the ordinary course of business or he cannot pay his debts as they become due,(…)
- Important > last part of a problem question
Key topics
- Action for the price
- Damages
- Real remedies against the goods
- Retent ion of title clauses
Recommended reading
- Bradgate - Chapter 18
- Atiyah - Chapters 25 & 26
- Goode - Chapter 15
- Sealy & Hooley - Chapter 12
- Bridge - Chapters 15 & 10
Articles
- “Reservation of title – past present and future”: McCormack: Conveyancer and Property Lawyer: 1994
Mar/Apr 129-139
- “When goods sold become a new species” Hicks: J.B.L.
1993 485 - 490
The seller has two sets of remedies:
(a) personal remedies
for the price
for damages for non-acceptance
for damages for refusal of delivery
(b) real remedies
Lien/right of retention
Stoppage in transit
Right of resale
A. Personal remedies
(most important one) Action for the price (s. 49 SOGA)
(1) Where, under a contract of sale, the property in the goods has passed to the buyer and he wrongfully
neglects or refuses to pay for the goods according to the terms of the contract, the seller may
maintain an action against him for the price of the goods.
(2) Where, under a contract of sale, the price is payable on a day certain irrespective of delivery and the
buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price,
although the property in the goods has not passed and the goods have not been appropriated to the
contract.
- Conditions: which need to be fulfilled in order to for the seller to claim
The buyer has wrongfully refused or neglected to pay
The property has passed to the buyer or the price is payable on a day certain irrespective of
delivery
(passing is important as this signifies ownership and liability)
Damages for non-acceptance (s. 50 SOGA)
(1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may
maintain an action against him for damages for non-acceptance.
(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course
of events, from the buyer’s breach of contract
(3) Where there is an available market for the goods in question the measure of damages is prima facie
to be ascertained by the difference between the contract price and the market or current price at the
time or times when the goods ought to have been accepted or (if no time was fixed for acceptance) at
the time of the refusal to accept
, This creates an additional burden for the seller
Buyer’s liability for not taking delivery of goods
- S. 37 SOGA
(1) When the seller is ready and willing to deliver the goods, and requests the buyer to take delivery,
and the buyer does not within a reasonable time after such request take delivery of the goods, he
is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for
a reasonable charge for the care and custody of the goods
seller can claim compensation for refusal of delivery within a reasonable time (e.g. if
the goods have perished)
B. Real remedies (remedies against the goods)
Unpaid seller defined (s. 38(1) SOGA) – is required
(1) The seller of goods is an unpaid seller (…):
(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.
e.g.: unpaid seller: a seller who has received a check (bill of exchange) which is later
dishonoured
Meaning of “unpaid seller
- Benjamin considers that a seller will be “unpaid” if the whole of the price has not in fact been paid or
tendered despite the fact that payment may not yet be due under the contract, e.g. because the
seller has sold the goods on credit. Whilst the buyer remains solvent, the seller cannot exercise his
right of lien over the goods during the credit period. Once the buyer becomes insolvent, however, the
seller can exercise his right of lien if he still has possession of the goods, or stoppage in transit, if they
are in transit to the buyer. The fact that payment is not yet due does not prevent the exercise of
those remedies during the credit period once the buyer becomes insolvent
Unpaid seller’s rights (s. 39 SOGA)
(1) Subject to this and any other Act, notwithstanding that the property in the goods may have passed to
the buyer, the unpaid seller of goods, as such, has by implication of law—
(a) a lien on the goods or right to retain them for the price while he is in possession of them;
(b) in case of the insolvency of the buyer, a right of stopping the goods in transit after he has
parted with the possession of them;
(c) a right of re-sale as limited by this Act.
(2) Where the property in goods has not passed to the buyer, the unpaid seller has (in addition to his
other remedies) a right of withholding delivery similar to and co-extensive with his rights of lien or
retention and stoppage in transit where the property has passed to the buyer.
Overall, seller must be in the possession of good, unpaid
Lien/right of retention (41, 43, 47(2) SOGA)
- Unpaid seller’s lien: s. 41
(1) Subject to 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:—
(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 lien or right of retention notwithstanding that he is in possession
of the goods as agent or bailee or custodier for the buyer.
- Meaning of “insolvent”: section 61(4) SOGA
A person is deemed to be insolvent within the meaning of this Act if he has either ceased to pay his
debts in the ordinary course of business or he cannot pay his debts as they become due,(…)
