A seller of goods is deemed to be an unpaid seller when:
- The whole of the price has not paid or tendered:
- A bill of exchange or other negotiable instrument has been received as a conditional payment,and the condition on which it was received has not been fulfilled by reason of the instrument or otherwise.
The following conditions must be fulfilled before a seller of goods can be deemed to be an unpaid seller:
- He must be unpaid and the price must be due.
- He must have an immediate right of action for the price.
- A bill of exchange or other negotiable instrument was received but the same has been dishonoured.
When payment is made by a negotiable instrument it is usually a conditional payment, the condition the condition being that the instrument shall be deadly honoured. If the instrument is not honoured, the seller
is deemed to be an 'unpaid seller'. A seller who has obtained a money decrease has not been satisfied.
'Seller' here means not only the actual seller, but also any person who is in the position of a seller,an agent of the seller to whom a bill of lading has been endorsed, or a consignee or agent who has himself paid for the goods or is directly responsible for the price.
