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Section 45 of The Sale of Goods Act, 1930

(1)The seller of goods is deemed to be an "unpaid seller" within the meaning of this Act—
1. (a)when the whole of the price has not been paid or tendered;
2. (b)when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.
(2)In this Chapter, the term "seller" includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of lading has been endorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price.

Summary

A seller is an unpaid seller if the entire price has not been paid or offered to them.
If a seller receives a check or other payment document that is later bounced or dishonored, they are considered an unpaid seller.
The term seller includes anyone in a similar position, like an agent who is personally responsible for the price.
A person who has paid for the goods on behalf of the buyer and is responsible for them is also treated as a seller here.

Practical examples

1Ian sells a car for 5,000 dollars but the buyer only gives him 4,500 dollars. Ian is an unpaid seller for the remaining 500 dollars.

2Jenny sells her laptop and receives a check. When she tries to cash it, the bank says there is no money in the account. Jenny is now an unpaid seller.

3A shipping agent pays the factory for a load of goods to be sent to a store. Because the agent is now responsible for that price, they are treated as a seller under this law.

FAQ

1. Who is an unpaid seller according to Section 45 of the Sale of Goods Act?

An unpaid seller is anyone who has not received the full price or whose payment document like a check was not honored.

2. Is a seller still unpaid if the buyer offered the money but the seller refused it under Section 45?

No, Section 45 of the Sale of Goods Act, 1930, says a seller is unpaid when the price has not been paid or tendered, meaning offered.

3. Does the Sale of Goods Act consider an agent as a seller in Section 45?

Yes, Section 45 of the Sale of Goods Act, 1930, says the term seller includes agents who are directly responsible for the price.

Test yourself

Q1.According to Section 45 of the Sale of Goods Act, 1930, a seller is unpaid if which of the following is true?

Q2.If a seller receives a bill of exchange as payment, when do they become an unpaid seller under Section 45 of the Sale of Goods Act, 1930?

Q3.Under Section 45 of the Sale of Goods Act, 1930, who else is included in the definition of a seller?

Q4.What does the term tendered mean in Section 45 of the Sale of Goods Act, 1930?

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