Final answer:
The right of resale for an unpaid seller is most commonly applicable when a buyer defaults on payment. To address buyer concerns about imperfect product information, sellers can offer warranties and service contracts as forms of reassurance.
Step-by-step explanation:
The right of resale is available to an unpaid seller primarily when the buyer defaults on payment. Option 2 is correct in this scenario. If the buyer has not paid for the goods as per the agreement and the unpaid seller has retained possession of the goods, they usually have the right to resell the products. This right is subject to the terms of the contract, and sometimes statutory law may require the seller to give notice to the original buyer.
Additionally, sellers need to reassure potential buyers when they are faced with imperfect information about the product. Sellers may offer a warranty, which is a commitment to remedy any defects by repairing or replacing the good for a certain period. Moreover, sellers can also extend a service contract, in which the buyer pays an additional amount, and the seller agrees to address any issues for a specified time frame. These service contracts are especially common for significant purchases like cars, home appliances, and even houses, providing an extra layer of reassurance to the buyer.