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Mercantile Laws-I

Notes (ii) The goods are delivered on board the ship belonging to the buyer. Under the bill of lading the
goods are deliverable to the buyer or his agents. Such a bill of lading is a delivery to the buyer
and therefore, there could be no right of stoppage in transit.

13.3.5 Right of Resale (Sec.54)

The unpaid seller, who has retained the possession of the goods in exercise of his right of lien or
who has resumed possession from the carrier upon insolvency of the buyer, can resell the goods,
(i) if the goods are of a perishable nature, without any notice to the buyer and (ii) in other cases
after notice to buyer calling upon him to pay or tender the price within a reasonable time and
upon failure of the buyer to do so.

13.4 Remedies for Breach of a Contract

In addition to the rights of a seller against goods provided in Secs.47 to 54, the seller has the
following remedies against the buyer personally. (i) suit for price (Sec.55); (ii) damages for non-
acceptance of goods (Sec.56); (iii) suit for interest (Sec.56).

13.4.1 Suit for Price (Sec.55)

Where under a contract of sale the property in the goods has passed to the buyer and the buyer
wrongfully neglects or refuses to pay the price, the seller can sue the buyer for the price of the
goods. Where the property in goods has not passed to the buyer, as a rule, the seller cannot fi le a
suit for the price; his only remedy is to claim damages.

Example: A sold certain goods to B for ` 5,000 and the price was agreed to be paid before
the expiry of ten days of the contract. B fails to pay the price within the stipulated time. A can fi le
a suit for price against B even though the goods have not been delivered or the property in goods
has not been passed to B.

13.4.2 Suit for Damages for Non-acceptance (Sec.56)

Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may
sue him for damages for non-acceptance. Where the property in the goods has not passed to
the buyer and the price was not payable without passing of property, the seller can only sue
for damages and not for the price. The amount of damages is to be determined in accordance
with the provisions laid down in Sec.73 of the Indian Contract Act, 1872. Thus, where there is
an available market for the goods prima facie, the difference between the market price and the
contract price can be recovered.

13.4.3 Suit for Interest (Sec.61)

When under a contract of sale, the seller tenders the goods to the buyer and the buyer wrongfully
refuses or neglects to accept and pay the price, the seller has a further right to claim interest on
the amount of the price. In the absence of a contract to the contrary, the court may award interest

at such rate as it thinks fit on the amount of the price. The interest may be calculated from the date
of the tender of the goods or from the date on which the price was payable. It is obvious that the
unpaid seller can claim interest only when he can recover the price, i.e., if the seller’s remedy is
to claim damages only, then he cannot claim interest.

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