Resale of Goods

Date: 2015-10-07; view: 415.

Stoppage in Transit

The rights of the unpaid seller. Lien

a. A lien is the right to retain possession of goods (but not to resell them) until the contract price has been paid.

b. The unpaid seller's lien is for the price only. When the price is tendered it does not enable him to retain possession for any other purpose, for example to recover the cost of storing the goods during the exercise of the lien.

a. After the seller has parted with the possession of the goods to a carrier for transmission to the buyer he can stop the goods and retake possession on the buyer becoming insolvent (i.e. if the buyer is unable to pay his debts as they fall due).

b. The period of transit operates from the time when the goods are handed to the carrier until the time when the buyer takes delivery of them. Transit is also terminated if:

i. The buyer obtains delivery before the arrival of the goods at the agreed destination, for example because the carrier hands them to the buyer's agent during transit; or

ii. If, on reaching the agreed destination, the carrier acknowledges to the buyer that he is holding the goods to the buyer's order; or

iii. If the carrier wrongfully refuses to deliver the goods to the buyer.

The general rule is that lien and stoppage in transit do not give the unpaid seller right to re-sell the goods. The exceptions are:

a. Where they are of a perishable nature; or

b. Where the buyer, after being given notice by the seller that he intends to resell, does not pay for them within a reasonable time; or

c. Where the seller has expressly reserved the right to resell if the buyer defaults in payment.