Unpaid Seller's Right of Stoppage of Goods in Transit

The right of stoppage in transit refers to the right of an unpaid seller to stop the goods while they are in transit to the buyer and to resume possession of the goods until payment or tender of the price. This right is available to the unpaid seller only in certain circumstances.

Circumstances under which the unpaid seller has the right of stoppage in transit:

1. Buyer becomes insolvent:
The unpaid seller has the right of stoppage of goods in transit only where the buyer becomes insolvent. Insolvency refers to a situation where the buyer is unable to pay his debts as they become due. In such a case, the unpaid seller can stop the goods in transit and demand payment of the price before delivering the goods to the buyer.

2. Buyer refuses to pay the price:
If the buyer refuses to pay the price of the goods, the unpaid seller can exercise his right of stoppage in transit. However, the right can be exercised only if the seller has a lien on the goods or the buyer has become insolvent.

3. Buyer acts fraudulently:
The unpaid seller can exercise his right of stoppage in transit if the buyer has acted fraudulently in relation to the goods. For example, if the buyer has obtained the goods by means of fraud or misrepresentation, the unpaid seller can stop the goods in transit.

Conclusion:
In conclusion, the unpaid seller has the right of stoppage of goods in transit only where the buyer becomes insolvent. The right can also be exercised if the buyer refuses to pay the price and the seller has a lien on the goods or the buyer has become insolvent. Finally, the right can be exercised if the buyer acts fraudulently in relation to the goods.