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Remedies of the buyer and seller 207

Example

Simon has sold a lorry to Barry for £20,000. After the contract was made, but before the lorry

has been delivered, Barry told Simon that he had changed his mind. He told Simon not to

bother delivering the lorry and that the price would not be paid. Barry has repudiated the

contract. Simon can terminate the contract and sue Barry for damages for non-acceptance.

If ownership of the lorry had passed to Barry, or if the contract fixed a definite date for

payment, Simon could sue for the price.

The real remedies of the unpaid seller

In addition to the personal remedies already explained, an unpaid seller of goods has
three real remedies (Fig. 7.9) which allow action to be taken against the goods sold. These
remedies are available only to an unpaid seller. Section 36 of the Act defines an unpaid
seller as:

(i) a seller who has not been paid, or to whom the buyer has not tendered, the whole of the
purchase price; or

(ii) a seller who has received a dishonoured cheque (or other negotiable instrument) as
payment for the goods.

The fact that the seller has given the buyer credit will not prevent the seller from being an
unpaid seller.
The three remedies which might be available to an unpaid seller of goods are:

(i) a lien over the goods;

(ii) the right to stop the goods in transit; and

(iii) the right to resell the goods.

The unpaid seller’s lien

Section 41 provides that the unpaid seller’s lien allows an unpaid seller to retain possession
of the goods (even if ownership has passed to the buyer or the goods should have been
delivered) in the following three circumstances:

Figure 7.8The seller’s damages for non-acceptance