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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?
Verified Answer
When the unpaid seller has parted with the goods to a carrier and the ...
The correct answer is (b) right of stoppage in transit.
Right of Stoppage in Transit
- The right of stoppage in transit is a powerful remedy available to an unpaid seller when the buyer has become insolvent.
- This right allows the unpaid seller to regain possession of the goods while they are still in transit, and before they reach the buyer.
- The main purpose of this right is to protect the unpaid seller from the risk of non-payment due to the buyer's insolvency.
The right of stoppage in transit is based on the following conditions:
- The seller must be unpaid for the goods.
- The goods must still be in transit, which means they have not yet reached the buyer or their destination.
- The buyer must have become insolvent.
How to Exercise the Right of Stoppage in Transit
- The unpaid seller can exercise this right by sending a notice to the carrier, informing them of their intention to stop the goods in transit.
- The carrier must then hold the goods until the seller takes possession of them.
- It is essential for the unpaid seller to act quickly, as the right of stoppage in transit can only be exercised while the goods are still in transit.
Comparison with Other Rights
- The right of lien allows the seller to retain possession of the goods until payment is made, but this right can only be exercised while the goods are still in the seller's possession.
- The right of resale allows the seller to resell the goods, but this right can only be exercised once the goods have been returned to the seller or when the contract contains an express provision for resale.
In summary, the right of stoppage in transit is a powerful remedy available to an unpaid seller when the buyer becomes insolvent. It enables the seller to regain possession of the goods while they are still in transit, thereby protecting them from the risk of non-payment due to the buyer's insolvency.
Right of Stoppage in Transit
- The right of stoppage in transit is a powerful remedy available to an unpaid seller when the buyer has become insolvent.
- This right allows the unpaid seller to regain possession of the goods while they are still in transit, and before they reach the buyer.
- The main purpose of this right is to protect the unpaid seller from the risk of non-payment due to the buyer's insolvency.
The right of stoppage in transit is based on the following conditions:
- The seller must be unpaid for the goods.
- The goods must still be in transit, which means they have not yet reached the buyer or their destination.
- The buyer must have become insolvent.
How to Exercise the Right of Stoppage in Transit
- The unpaid seller can exercise this right by sending a notice to the carrier, informing them of their intention to stop the goods in transit.
- The carrier must then hold the goods until the seller takes possession of them.
- It is essential for the unpaid seller to act quickly, as the right of stoppage in transit can only be exercised while the goods are still in transit.
Comparison with Other Rights
- The right of lien allows the seller to retain possession of the goods until payment is made, but this right can only be exercised while the goods are still in the seller's possession.
- The right of resale allows the seller to resell the goods, but this right can only be exercised once the goods have been returned to the seller or when the contract contains an express provision for resale.
In summary, the right of stoppage in transit is a powerful remedy available to an unpaid seller when the buyer becomes insolvent. It enables the seller to regain possession of the goods while they are still in transit, thereby protecting them from the risk of non-payment due to the buyer's insolvency.
Most Upvoted Answer
When the unpaid seller has parted with the goods to a carrier and the ...
Right of Stoppage in Transit
The right of stoppage in transit is a right available to the unpaid seller to stop the goods while they are in transit to the buyer if the buyer becomes insolvent. The right of stoppage in transit is available only when the goods are in transit i.e. they have left the seller's possession but have not yet been delivered to the buyer.
Conditions for Exercise of Right of Stoppage in Transit
The right of stoppage in transit can be exercised by the unpaid seller if the following conditions are met:
1. The buyer becomes insolvent before the goods are delivered to him.
2. The goods are in transit at the time the seller comes to know about the buyer's insolvency.
3. The seller has parted with the possession of the goods but not the ownership.
Effect of Exercise of Right of Stoppage in Transit
If the unpaid seller exercises his right of stoppage in transit, the following effects will arise:
1. The transit of goods is deemed to be at an end from the time when the seller exercises his right of stoppage in transit.
2. The seller becomes entitled to the possession of the goods.
3. The buyer's right to receive the goods is extinguished.
4. The seller can either resell the goods or retain them.
Conclusion
Thus, it can be concluded that when the unpaid seller has parted with the goods to a carrier and the buyer has become insolvent, he can exercise the right of stoppage in transit to stop the goods while they are in transit to the buyer.
The right of stoppage in transit is a right available to the unpaid seller to stop the goods while they are in transit to the buyer if the buyer becomes insolvent. The right of stoppage in transit is available only when the goods are in transit i.e. they have left the seller's possession but have not yet been delivered to the buyer.
Conditions for Exercise of Right of Stoppage in Transit
The right of stoppage in transit can be exercised by the unpaid seller if the following conditions are met:
1. The buyer becomes insolvent before the goods are delivered to him.
2. The goods are in transit at the time the seller comes to know about the buyer's insolvency.
3. The seller has parted with the possession of the goods but not the ownership.
Effect of Exercise of Right of Stoppage in Transit
If the unpaid seller exercises his right of stoppage in transit, the following effects will arise:
1. The transit of goods is deemed to be at an end from the time when the seller exercises his right of stoppage in transit.
2. The seller becomes entitled to the possession of the goods.
3. The buyer's right to receive the goods is extinguished.
4. The seller can either resell the goods or retain them.
Conclusion
Thus, it can be concluded that when the unpaid seller has parted with the goods to a carrier and the buyer has become insolvent, he can exercise the right of stoppage in transit to stop the goods while they are in transit to the buyer.
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When the unpaid seller has parted with the goods to a carrier and the ...
Right of stoppage in transit means right of unpaid seller to regain possession when the buyer become insolvent and the seller is parted with goods hence those two condition form base for 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 lienb)right of stoppage in transitc)right of resaled)none of the aboveCorrect answer is option 'B'. Can you explain this answer?
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