When the unpaid seller has exercised his right of lien on his retaining the possession of the goods or resumes possession of the goods by exercising his right of stoppage in transit upon insolvency of the buyer, he can re-sell the goods under the following circumstances:
1) where the goods are of perishable nature;
2) where the seller gives notice to the buyer of his intention to re-sell the goods (no notice is necessary in case of perishable goods) and the buyer does not pay or tender the price within a reasonable time after the notice;
3) where the seller has expressly reserved his right of re-sale in case the buyer makes default.
The seller can hold the buyer responsible for loss suffered to breach of contract. If on re-sale, the unpaid seller receives any profits, and he given notice to the buyer of re-sale, the unpaid seller is entitled to retain the profits.
However, when the unpaid seller has not given notice to the buyer, then he loses his right to recover damages from the buyer and also has to pay the profits to the buyer arising from the re-sale. If however, in a re-sale, there is loss to the seller, he can claim it from the buyer as damages from the breach of contract. No notice is necessary where the seller has expressly reserved the right of re-sale in case the price is not paid. The purchaser from the unpaid seller gets an absolute and good title to the goods as against the original buyer, even if the seller has failed to give notice to the buyer of his intention of re-sale.
Where the seller expressly reserves a right of re-sale in case the buyer should make default, and, on the buyer, making default, re-sells the goods, the original contract of sale is there by rescinded, but without prejudice to any claim which the seller may have for damages. The goods once again become the property of the seller and the unpaid seller affects a fresh sale as original owner of the goods. The damages which the seller can claim are the difference between the contract price and the Market price at the date of the breach.
When seller resells the goods with prior notice to buyer, profits on resale do not go to the buyer.
Right of with holding delivery:
Where the good has not passed on to the buyer properly, the seller has a right to with hold delivery of the goods.
Reservation of right of disposal:
Under the following instances, the seller reserves the right of disposal over the goods:
1) Where seller imposes certain conditions and until the conditions are fulfilled
2) Where goods are shipped or delivered to a railway administration for carriage by railway and by the bill of lading or railway receipt, as the case may be, and the goods are deliverable to the order of the seller or his agent;
3) Where the seller transmits to the buyer bill of exchange for the price with bill of lading or railways receipt and the buyer fails to honor the bill of exchange and wrongfully retains the bill of lading or the railway receipt. Where goods are sent by value payable parcel, until actual delivery and payment is made the goods remain the property of the sender.
Besides the above rights, the seller has the following rights against the buyer personally:
1) sue the buyer for the price of the goods
2) the seller may sue the buyer for damages for wrongfully neglecting or refusing to accept the goods;
3) Recover interest from the buyer where there is specific agreement to that effect. If there is no specific agreement, the seller may charge interest on the price when it becomes due.
In the absence of a contract to the contrary, the Court may award interest to the seller in a suit by him at such arte as thinks fit on the amount of the price from the date of the tender of the goods or from the date on which the price was payable.