Rights of an Unpaid Seller


Upholding the Rights of an Unpaid Seller: Empowering Business Transactions

The relationship between a buyer and a seller is crucial for the smooth functioning of any business transaction. However, instances may arise where the seller remains unpaid despite delivering goods or providing services as agreed upon. In such cases, it is important to understand the rights of an unpaid seller to ensure fair treatment and protect their interests. This article explores the rights granted to an unpaid seller under commercial laws.

  1. Lien on Goods:
    One of the most significant rights of an unpaid seller is the right to retain possession of the goods until payment is made in full. This right serves as a security measure, allowing the seller to secure their unpaid dues by retaining control over the goods sold.
  2. Right of Stoppage in Transit:
    When the buyer becomes insolvent or fails to pay, the unpaid seller can exercise the right of stoppage in transit. This empowers the seller to reclaim the goods while they are still in transit, even if the buyer has already taken possession.
  3. Right to Resale:
    If the buyer defaults in payment, the unpaid seller has the right to resell the goods to recover the outstanding amount. This can be done through a proper legal process, and any excess amount obtained from the resale can also be claimed by the seller.
  4. Right to Sue for Price:
    Alongside the right to retain possession, an unpaid seller can choose to sue the buyer for specific performance. This legal action focuses on recovering the agreed-upon price of the goods or services delivered.
  5. Compensation for Damages:
    In case of non-payment, the unpaid seller has the right to seek damages for any losses suffered due to the buyer’s default. This compensation can include costs incurred, interest, and any potential loss of profit.


Understanding the rights of an unpaid seller is essential for both businesses and consumers. These rights provide a legal framework to protect the interests of sellers and maintain the integrity of business transactions. By upholding these rights, we can foster trust, promote fairness, and ensure the sustainability of commercial relationships. It is vital for both parties to be aware of and respect these rights, enabling a thriving business environment.