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When the unpaid seller has parted with the goods to a carrier and the buyer has become insolvent he can exercise
- a)right of lien.
- b)right of stoppage in transit.
- c)right of resale.
- d)none of the above.
Correct answer is option 'B'. Can you explain this answer?
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When the unpaid seller has parted with the goods to a carrier and the ...
The unpaid seller refers to a seller who has not yet received payment for the goods they have sold. When the unpaid seller has already handed over the goods to a carrier and the buyer becomes insolvent (unable to pay their debts), the unpaid seller can exercise the following rights:
1. Right of lien:
- The right of lien allows the seller to retain possession of the goods until the buyer pays for them in full.
- This right can be exercised by the unpaid seller when the buyer becomes insolvent even after the goods have been handed over to the carrier.
- However, in this specific scenario, the right of lien cannot be exercised as the goods have already been handed over to the carrier.
2. Right of stoppage in transit:
- The right of stoppage in transit allows the unpaid seller to stop the goods in transit and regain possession of them.
- This right can be exercised when the buyer becomes insolvent after the goods have been dispatched but before they reach the buyer.
- In this case, since the goods have been handed over to the carrier, they are still in transit, and the unpaid seller can exercise the right of stoppage in transit.
3. Right of resale:
- The right of resale enables the unpaid seller to resell the goods to recover the unpaid amount.
- This right can be exercised when the buyer becomes insolvent and the goods have not been delivered to them.
- In this scenario, since the goods are still in transit, the unpaid seller can exercise the right of resale.
4. None of the above:
- This option is incorrect as both the right of stoppage in transit and the right of resale can be exercised by the unpaid seller in the given situation.
Therefore, the correct answer is option B: right of stoppage in transit.
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When the unpaid seller has parted with the goods to a carrier and the buyer has become insolvent he can exercisea)right of lien.b)right of stoppage in transit.c)right of resale.d)none of the above.Correct answer is option 'B'. Can you explain this answer?
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