As per Sale of Goods Act, the seller of goods is deemed to be unpaid seller, when the _____ has/have not been paid.

The seller of goods is deemed to be an “unpaid seller”, when the whole of the price has not been paid or tendered or when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise. Thus, option 2 is the correct answer.