Pakistan study notes for Matric, Intermediate, B.A, B.COM BSC, M.A, BCS. Free Pakistani Urdu educational school, colleges and University notes.

Who is unpaid seller-Section 45

Who is unpaid seller-Section 45

Meaning: A seller of goods is deemed to be an unpaid seller

(a) when the whole of the price has not been paid or tendered, or

(b) when a conditional payment was made by bill of exchange or other negotiable instrument which has been dishonored.

Remember that a seller is an unpaid seller only when he sold the goods on cash terms and not on credit terms.



A seller shall be an unpaid seller only- when the following conditions are fulfilled:

a. seller must be unpaid and the price must be due.

b. seller must have immediate right of action for the price.

c. bill of exchange or other negotiable instrument received has been dishonoured.

Payment by negotiable instruments:

Negotiable instrument means a cheque, bill of exchange or promissory note. When payment is not received in cash but in any of the aforesaid mode it is a conditional payment, the condition is that the cheque etc. shall be duly honored. So if the instrument is not honored, the seller is deemed to be unpaid seller. Again, where a seller obtained money decree for the price which remains unsatisfied, the seller is still unpaid.


Seller meaning:

Seller under section 45(2) means:

a. actual seller i.e. owner of goods sold.

b. agent of the seller to whom bill of lading is endorsed.

c. consignee or agent who himself paid for goods or is directly responsible for the price.

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