What does stoppage in transit mean?

(also stoppage in transitu) the legal right of a seller of goods to stop the sale at any time before the buyer receives them, especially in situations where it becomes clear that the buyer cannot pay for the goods: He may still be able to recover the goods by exercising his right of stoppage in transit.

How can a seller stop the goods in transit?

Section 44 of the Sale of Goods Act 1979 provides a seller with a statutory right to have the goods stopped while still in transit to the buyer after it has become known that the buyer is insolvent and has failed to pay for the goods.

How is stoppage in transit affected?

(2) When notice of stoppage in transit is given by the seller to the carrier or other bailee in possession of the goods, he shall re-deliver the goods to, or according to the directions of, the seller. The expenses of such re-delivery shall be borne by the seller.

When can unpaid seller stop the goods in transit?

If a buyer fails to pay the price within the decided time, then unpaid seller has the right to stop the goods in transit. The unpaid seller has the right to resell the goods. 1.

When transit comes to an end?

Meaning of transit: Transit does not mean that the goods should be in motion. If the goods are delivered to the carrier or other bailee by the seller the transit is commenced and it comes to an end when the buyer acquires possession thereof.

Which right is considered with stoppage in transit?

Right of Stoppage in Transit. This right is an extension to the right of lien. The right of stoppage in transit means that an unpaid seller has the right to stop the goods while they are in transit, regain possession, and retain them till he receives the full price.

Who has the right for stoppage in transit?

When the buyer of goods becomes insolvent, an unpaid seller who has parted with the possession of the goods has the right of stopping them in transit, that is to say, he may resume possession of the goods as long as they are in the course of transit and may retain them until payment or tender of the price.

What is the section of right of stoppage in transit?

Subject to the provisions of this Act, when the buyer of goods becomes insolvent, the unpaid seller who has parted with the possession of the goods has the right of stopping them in transit, that is to say, he may resume possession of the goods as long as they are in the course of transit, and may retain them until …

What is the right of stoppage in transit?

The right of stoppage in transit means that an unpaid seller has the right to stop the goods while they are in transit, regain possession, and retain them till he receives the full price.

What is meant by right of stoppage in transit?

: the right of a seller of goods to stop them on their way to the buyer and resume possession of them (as on discovery of the buyer’s insolvency) — called also stoppage in transit.

What is the difference between right to lien and right to stoppage in transit?

While the right of lien is the right of the unpaid seller to retain the possession over the goods, the right of stoppage in transit is the right of the unpaid seller to regain possession of the goods. The right of stoppage of goods can be exercised by the seller when the buyer becomes insolvent.

Can a remainder of the goods be stopped in transit when a part delivery has been made?

(7) Where part delivery of the goods has been made to the buyer or his agent in that behalf, the remainder of the goods may be stopped in transit, unless such part delivery has been given in such circumstances as to show an agreement to give up possession of the whole of the goods.

When to give notice of stoppage in transit?

The unpaid seller may exercise its right of stoppage either by taking actual possession of the goods or by giving notice of the seller’s claim to the carrier or other bailee who has possession of the goods while in transit. The notice may be given either to the person in actual possession of the goods or to the person’s principal.

Can a right of stoppage in transit be exercised?

The right of stoppage in transit can be exercised in respect of part of the goods in transit even if part has been acquired by the buyer.

Can a buyer claim right of stoppage in transit?

If the buyer or the buyer’s agent obtains delivery of the goods before their arrival at its destination, the goods are no longer in transit and the buyer cannot claim to stop the goods. The right of stoppage does not require an actual breach of the contract to have occurred in order for the innocent party to exercise the right.

Can a seller stop goods in transit in Australia?

Fortunately, in such scenarios, the Sale of Goods Acts in each state and territory of Australia afford the unpaid seller of goods, in the case of the insolvency of the buyer, a right of stopping the goods in transit notwithstanding that the property in the goods may have already passed to the exporter (or in some cases to the overseas purchaser).