Stoppage in transitu is a legal concept that grants sellers the authority to halt the delivery of goods that are currently being transported to the buyer. This authority is exercised when the buyer has not fulfiled payment obligations and the seller has reasonable grounds to suspect that the buyer will be unable to make the payment. Consequently, the seller can assume possession of the goods and sell them to another party in order to recoup the expenses incurred. This right is crucial for sellers as it safeguards them against potential financial losses resulting from non-payment by buyers.
Stoppage in transitu is the seller’s right to halt the delivery of goods in transit to the buyer. This right is triggered when the buyer becomes insolvent or breaches the sales contract. For instance, if a seller ships goods to a buyer and later discovers the buyer’s insolvency, the seller can use stoppage in transitu to instruct the carrier to hold the goods until they can be returned or resold. This demonstrates how stoppage in transitu safeguards the seller’s interests when the buyer is unable to meet their obligations. By exercising this right, the seller can prevent the goods from reaching the buyer and potentially being lost or damaged, and instead take action to recover or resell the goods.
Stoppage in Transitu is a legal right of the seller to stop the goods in transit and retain possession of them until the buyer pays the full purchase price.
The seller can exercise the right of Stoppage in Transitu when the buyer becomes insolvent or fails to pay the full purchase price.
The seller can exercise the right of Stoppage in Transitu until the goods are delivered to the buyer or to a third party on the buyer’s behalf.
The seller can retain possession of the goods until the full purchase price is paid or until the goods are sold to a third party.
Yes, the buyer can challenge the right of Stoppage in Transitu if they can prove that they have paid the full purchase price or that the seller has no right to exercise the right of Stoppage in Transitu.
The seller is still entitled to exercise the right of Stoppage in Transitu, but the buyer may be entitled to claim damages for the damaged goods.
No, the seller cannot exercise the right of Stoppage in Transitu if the goods have already been delivered to the buyer.
No, the seller cannot exercise the right of Stoppage in Transitu if the goods have been sold to a third party.
The seller can still exercise the right of Stoppage in Transitu and retain possession of the goods until the buyer pays the full purchase price.
Yes, the seller can sell the goods to a third party while exercising the right of Stoppage in Transitu, but the buyer may be entitled to claim damages for any loss suffered as a result.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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