Distinguish between the seller‟s right of lien and the right of stoppage in transitu

Lien Stoppage
This is the right of unpaid seller in possession of the buyers goods to retain them as security for the  price.          This lien is possessory in character. It is exercisable by the unpaid seller over  any  goods  in his possession.                It is exercisable even where the seller holds as the buyers agent.

 

Under section 41 (1) of the Sale of Goods Act, the seller Lien is exercisable in the following circumstances:

·    If the buyer becomes insolvent

·    if the goods have not been sold on credit

·    If the goods are sold on credit but the terms of credit has expired.

This is the right of unpaid seller who has already parted with possession of the goods to resume such possession as long as the goods are in the course of transit.

 

Under section 44 of the Sale of Goods Act, the right of stoppage in transitu is only exercisable if the buyer becomes insolvent.

 

Under section 45 of the Act goods are deemed to be in “course of transit” from the time they

are delivered to a carrier for transmission to the buyer until the buyer or his agent obtain lawful possession.

 

Under section 46 (1) of the Act the right of stoppage in transitu is exercisable either by:

–  taking possession of the goods.

–  giving notice of the sellers claim to the carrier or his principal.

 

Once the notice is given, the carrier must deliver the goods in accordance with the sellers directions and at the expense of the seller by exercising the right of stoppage in transitu the seller has the opportunity to exercise alien over the goods.

 

Whereas the right of lien is based on possession, the right of stoppage in transitu is

not.



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