Rights And Remedies Notes

• Unpaid seller = when whole of price not paid or when payment conditional + condition not fulfilled (SGA 38(1))

• Rights of unpaid seller (1) right of lien; (2) right of stopping goods in transit; (3) right of re-sale (SGA 39(1))

1. Seller’s lien on the goods:

• SGA 41 unpaid S in possession of goods entitled to retain possession:

1. Until paid;

2. Where any credit period has expired or

3. Where B has become insolvent

S43 right of lien lost if goods paid for, consigned to carrier without ROT or where B has possession of goods or by waiver of S

3. Re-sale by seller:

• SGA 48(3) unpaid S can re-sell goods where:

1. Goods are perishable

2. S gives notice to B of intention to do so

• Limit: S must give B notice + wait to see if B tenders price within a reasonable time

• Unpaid S who re-sells goods passes good title (must be in possession – have lien/right to stoppage in transit)

• Original contract rescinded; B obligations to pay discharged; however S can sue B for damages if suffers loss

1. Action for the price (SGA 49):

• S can sue B for price if B has property in goods but has not paid or if price due on ‘a day certain’ (SGA 49)

1. SGA 49(1) S can bring action only if ownership has passed (check ROT clause) + B fails / refuses to pay

2. SGA 49(2) S has limited right to bring action for price, irrespective of whether ownership has passed, where price is payable on ‘a day certain’ and B refuses to pay

• Thus S does not necessarily have right, depends on ownership of goods in question

1. Incorporation of the terms

2. Breach of contract

3. Primary remedy of the Seller and whether worth pursuing?

4. Availability of alternative remedy under retention of title clause

5. For each item:

• Who owns item and why?

• Are Seller’s rights under ROT clause enforceable?

• How would item be identified and can it be taken back?

• If cannot be recovered, could money be recovered instead?

6. Practical difficulties

7. Could Buyer counterclaim?