When the buyer does not pay the price of the goods,the seller is deemed to be unpaid. Civil Code 2074 does not provide definition of unpaid seller. A seller is said to be an unpaid seller if :-

  • Goods are sold on cash not credit.
  • He/She should be unpaid for the sold goods.
  • He/She should not refuse to receive the payment.

Rights of unpaid seller

An unpaid has two types of rights they are as follows:

A) Right against the goods:

The following are the right against the goods:

a) Right to lien : An unpaid seller has the right to retain goods until the price is paid. He/She has right to retain  the goods in the following cases:

  •  if the goods are sold on cash term not on credit term.
  • if sold on credit when the credit period expire.
  • if the buyer become insolvent.
  • if the goods are in the seller possession.

b) Right of stoppage in transit : The seller also has right of stoppage in transit. The seller can keep hold of the goods from the carrier. The right can only be exercised by the seller on the following two condition:

  • if the buyer become insolvent.
  • if the goods are in transit (if not delivered).

c) Right to resale : He/She can resale the goods on the following conditions:

  • If the goods are perishable in nature.
  • If these rights is mentioned in the contract of sale.
  • If the seller gives a notice of resale and the buyer does not pay the price within a reasonable time.

B) Right against the buyer personally: The unpaid seller also has the rights against the buyer personally on the following:

a) Suit for damages: Unpaid seller has a right to sue the buyer for damages if the buyer refuses to accept the goods and pay the price. The seller can receive the following damages from the buyer:

  • Any loss suffered from the non-acceptance of goods.
  • A reasonable charge for care and custody of goods.

b) Suit for price: The unpaid seller has a right to sue for aggreived price. These right applies even when the goods are in the possession of seller.

c) Suit for interest : Unpaid seller also has right to sue for interest. He can sue for interest if there is agreement between the buyer and seller about the interest on price of goods. If there is no specific agreement then the seller can sue for intrest from the date he notifies the buyer.









The “corporate veil” symbolizes the differences between the company and the shareholders. The effect of “lifting” the corporate veil is that the shareholders are regarded as relevant actors rather the company, on whom the obligation of the company s placed.

Corporation is a legal entity separate from it members. It is capable of enjoying rights and being subject to duties which are not the same as enjoyed by its members.From the juristic point of view, a company is a legal person distinct from its members ever since the decision in case of Salomon v. Salomon and Co. Ltd. (1897) A.C 22.

Following are the cases where the courts lift the corporate veil under case law :

Daimler Co. v. Continental Tyre & Rubber Co. (1916) 2 AC 307:

A company was incorporated in England for the purpose of selling tyres manufactured in Germany by a German company. The German company held the bulk of the shares in the English company. The holders of the remaining shares (except one)and all the directors were Germans, resident in Germany. During the First World War the English company commenced an action to recover a trade debt. And the question was whether the company had become an enemy company and should, therefore, be barred from maintaining the action.

It was held that a company incorporated in the United Kingdom is a legal entity, a creation of law with the status and capacity which the law confers. It cannot be loyal or disloyal. It can be neither friend nor enemy. But it may assume an enemy character when person in de facto control of its affairs are residents in any enemy country or, whether resident, are acting under control of enemies. Accordingly the company was not allowed to proceed with the action. If the action had been allowed the company would have been used as machinery by which the purpose of giving money to the enemy would be accomplished. That would be monstrous and against the public policy.

Gilford Motor Co. v. Horne, [1933] 1 Ch 935:

Mr. H was appointed as a managing director of the plaintiff company on the condition that he shall not at any time while he shall hold the office of a managing director or afterwards, solicit or entice away the customers of the company. Shortly afterwards, his employment was terminated under an agreement and he opened a business in the name of a company and began solicit the plaintiff’s customers.

It was held that the company was a mere cloak or sham for the purpose of enabling the defendant to commit a breach of his covenant against solicitation. The defendant company was just a channel used by Mr. H for the purpose of enabling him to obtain the advantage of the customers of the plaintiff company, and the defendant company ought to be restrained as well as the defendant H.



Bill of Lading, B/L for short, is the most important shipping document in international trade. The bill of lading works as a receipt of freight services. It is a contract between a freight carrier and shipper and a document of title.

The contract between a shipper and the freight carrier is established when the shipper or their agent made a booking with the carrier  to carry the cargo from A to B. And the B/L is the evidence.

Types of bill of lading:

  • Straight bill of lading: The straight bill of lading is specified to the particular party and the specified party cannot re-assign it to anyone else.The party only has to take the delivery of the cargo and the cargo cannot be sold by transferring the bill of lading to another party’s name.
  • Order bill of lading: It is a negotiable bill of lading. Unlike straight bill of lading, it can be transferred by endorsement and delivery of the bill. Generally, goods which have not been paid-for in advance are shipped under order bill of lading.
  • Bearer bill of lading: The bearer bill of lading is the one in which the bearer is the owner of the cargo and  their is no consignee named in the bill of lading. This kind of bill of lading is rarely found as there are huge risks involved in the misuse of this kind of bill of ladings.
  • Through bill of lading: A through bill of lading is a legal document that allows for the transportation of goods both within domestic borders and through international shipment. A single bill of lading covering receipt of the cargo at the point of origin for delivery to the ultimate consignee, using two or more modes of transportation.








Law of Carriage .

According to Civil Code 2074, Sec 602 , A contract of carriage of goods is transportation of goods from one place to another. However, The Civil Code 2074, does not regulate the carriage of goods by land, transport, ropeway, packed animal etc.

Types of carrier

A carrier is a person or a company who carries good from one place to another for payment. Carrier may be of two types and they are:

i) Common carrier: Common carrier is a person or company who carries goods of general public without discrimination for a charge on a regular basis.

ii) Private carrier: Private carrier is an occasional carrier. It acts on the basis of individual contract.

Rights, Duties and Liabilities of common carriers

The rights of common carrier are as follows –

  1. Right to receive the remuneration.
  2. Right to receive extra charge.
  3. Right to refuse.
  4. Right to travel from a regular route.
  5. Right to lien.
  6. Right to sale.
  7. Right to store.
  8. Right to limit the liability.
  9. Right of compensation.
  10. Right to insure.

Duties of common carrier are as follows-

  1. Duty to carry.
  2. Delivery to right person.
  3. Duty not to discriminate.
  4. Duty to carry on a regular route.
  5. Duty to compensate.

Liabilities of common carrier are as follows-

  1. Liability for undeclared goods.
  2. Liability for declared goods.
  3. The carrier is not liable when there is fundamental change in the circumstances which makes the performance impossible.







Contract of Guarantee.

A contract of guarantee is contract in which the guaranter (surety) promises to pay the debt or any other act in case the principle debtor fails to pay. According to Civil Code  2074, Section 563 (d) , A contract of guarantee is a contract in which a party (surety) promises to pay the debt or perform the work or duty in case the original debtor (principal debtor) defaults.


1. Tripartite Contract :

It is a tripartite agreement involving three parties namely creditor, principle debtor and surety. The party giving guarantee is surety. The party on whose default the guarantee is given is principal debtor, The person to whom the guarantee is given is creditor.

2. Concurrence :

In contract of guarantee there must be concurrence of  all the three parties because it is a tripartite agreement. Hence, a person cannot become surety without the consent principal debtor or vice versa.

3. Primary Liability :

The primary liability is with the principal debtor. Surety liability is secondary which arise only when the principle debtor is at default.

4. Consideration :

There is no direct consideration between surety and creditor. The loan received by the principal debtor is sufficient consideration.

5. Must be in writing :

According to Civil Code 2074, it must be in written form to be enforceable like in English law. But In India it may be oral or in written form.


Cases related to Termination of Tenancy of Land.


Mithilesh Kumar Singh Vs. Right Honorable Prime
Minister et. al Ne.Ka.Pa. 2056, No. 7, Decision No. 6746,
Pg. 478: Division of land into two equal halves pursuant to
Section 26 D doesnot amount to the violation of
fundamental rights under The Constitution of Kingdom of
Nepal 1990.


Sonma Devi Telin Vs. Makabul Raja Mansuri
(NKP 2070, Vol.6, Decision No. 9024), The landowner and
tenant cannot be from the same family.


Murali Damini Vs. Galu Damini (NKP 2074, Vol. 3, Decision
No. 9779) The landowner could not expel the tenant under the
Section 29 of the Land Act after the amendment of the act on
2053/9/29 B.S.


Bishnu Prasad Vs. Sitaram Pakka (NKP 2072, Vol. 6,
Decision No. 9419): After the death of the tenant the landowner
may nominate those from the family member of the deceased
upon whom he have a confidence or faith.

Industrial Enterprises Act,2038(1981)

Section 20:Delegation of Authority:Government of Nepal may delegate the authority ,either conferred upon it or upon the Department of Industry or the Department of Cottage and Rural Industry under this Act or under the Rules made under this Act,to any department ,office or officer.