Rights of Unpaid Seller against the Buyer Personally

The unpaid seller, has the following three rights of action against the buyer personally:

1. Suit for price (Sec. 55). Where property in goods has passed to the buyer; or where the sale
price is payable on a day certain, although the property in goods has not passed; and the buyer
wrongfully neglects or refuses to pay the price according to the terms of the contract, the seller is
entitled to sue the buyer for price, irrespective of the delivery of goods. Where the goods have
not been delivered, the seller would file a suit for price normally when the goods have been
manufactured to some special order and thus are unsaleable otherwise.

2. Suit for damages for non-acceptance (Sec. 56). Where the buyer wrongfully neglects or
refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance.
The sellers remedy in this case is a suit for damages rather than an action for the full price of the
goods.

The damages are calculated in accordance with the rules contained in Section 73 of the Indian
Contract Act, that is, the measure of damages is the estimated loss arising directly and naturally
from the buyers breach of contract. Where the goods have a ready market the principle
applicable is that the seller may recover from the buyer damages equal to the difference between
the contract price and the market price on the data of the breach of the contract. Thus, if the
difference between the contract price and market price is nil, the seller can get only nominal
damages ( Charter vs Sullivan). But where the goods do not have any ready market, the measure
of damages will depend upon the facts of each case.



For example, in Thompson Ltd. Vs Robinson the damages were assessed on the basis of profits
lost. In that case, T Ltd., who were car dealers, contracted to supply a motorcar to R.R refused to
accept delivery. It was found as a fact that the supply of cars exceeded the demand at the time of
breach and hence in a sense there was no market price on the date of breach. Held, T Ltd., were
entitled to damages for the loss of their bargain viz., the profit they would have made, as they
had sold one car less than they otherwise would have sold. To take another illustration, if the
goods have been manufactured to some special order and they are unsaleable and have been
manufactured to some special order and they are unsaleable and have no value at all for other
buyers, then the seller may even be allowed the full price of the goods as damages.

1. Suit for special damages and interest (Sec.61) This Section entitles the seller to sue the
buyer for special damages also for such loss which the parties knew, when they made the
contract, to be likely to result from the breach of it. In fact the Section is only declaratory of the
principle regarding special damages laid down in Section 73 of the Indian Contract Act. The
Section also recognizes unpaid sellers right to get interest at a reasonable rate on the total unpaid
price of the goods sold, from the time it was due until it is actually paid. (Telu Ram Jain vs
Aggarwal & Sons).


(a) Suit for Damages for Non-delivery [Section 57] Where the seller wrongfully neglects or
refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-
delivery.

(b) Suit for Specific Performance [Section 58] In any suit for breach of contract to deliver
specific or ascertained goods, the court may direct that the contract shall be performed
specifically.

(c) Suit for Breach of Warranty [Section 59] Where there is a breach of warranty by the seller,
or where the buyer elects or is compelled to treat any breach of a condition on the part of the
seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled
to reject the goods, but he may

(i) Set up against the seller the breach of warranty in diminution or extinction of the price;
or (ii) Sue the seller for damages for breach of warranty.

Note: The fact that a buyer has set up a breach of warranty in diminution or extinction of the
price does not prevent him from suing for the same breach of warranty if he suffered further
damage. [Section 59(2)]

Example: X sold a second hand Radio to Y who spent Rs 100 on the repair of this Radio. This
Radio was seized by the police as it was a stolen one. Y filed a suit against X for recovery of
damages for breach of warranty of quite possession including the cost of repairs. It was held that
Y was entitled to recover the same. [Mason v. Burmingham]

(d) Right to Treat the Contract as Rescinded or Operative in Case of Repudiation of Contract by
Seller before due Date [Section 60] Where seller repudiates the contract before the date of
delivery, the buyer may either treat the contract as subsisting and wait till the date of delivery, or
he may treat the contract as rescinded and sue for damages for the breach.

(e) Suit for Interest [Section 61(2)] In case of breach of the contract on the part of the seller, the
buyer may sue the seller for interest from the date on which the payment was made.