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CA Foundation · Business Laws · The Sale of Goods Act, 1930

Sameer sold a machine to Tarun for Rs 4,00,000 payable on delivery. Sameer, still holding the machine, gave Tarun a reasonable notice to pay, but Tarun refused. Sameer resold the machine to Uday for Rs 3,70,000. Which statement is correct?

Sameer can recover the Rs 30,000 shortfall from Tarun. After reasonable notice and non-payment, an unpaid seller may resell the goods and claim the loss from the original buyer. The loss is Rs 4,00,000 less Rs 3,70,000 resale price.

  1. AThe resale is void because the property had passed to Tarun
  2. BSameer must give the Rs 3,70,000 to Tarun
  3. CSameer can recover the Rs 30,000 shortfall from Tarun as damages for non-acceptanceCorrect
  4. DSameer must first obtain a court order before resale

Explanation

Where an unpaid seller gives notice of intention to resell and the buyer does not pay within a reasonable time, the seller may resell and recover from the original buyer any loss caused by the breach. Loss is 4,00,000 - 3,70,000 = Rs 30,000. A court order is not required.

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