Right of stoppage of goods in transit

Right of stoppage of goods in transit – The right of stoppage in transit means the right to stopping the goods while they  are  in transit, to regain possession and to retain them until the price is paid. The essential  feature  of  stoppage  in  transit  is  that  the  goods  should  be  in  the  possession  of  someone intervening between the seller and the buyer.

The unpaid seller can exercise the right of stoppage in transit if: (a) The seller has parted with the possession of the goods.

(b) The buyer has not taken possession of goods. (c)  Buyer has become insolvent.

The unpaid seller may exercise the right to stoppage in transit in any one of the following 2 ways : (a) by taking actual possession of the goods, or

(b) By giving notice of his claim to the carrier or other bailee in whose possession the goods are.

The right to stoppage in transit is lost under the following circumstances: (a) If the buyer or his agent obtains possession.

(b) If after arrival of the goods at the appointed destination, the carrier or the bailee acknowledges to the buyer that he holds the goods on his (buyer’s) behalf.

(c) If the carrier or bailee wrongfully refuses to deliver the goods to the buyer or his agent.

(d) Where the part delivery of the goods has been made to the buyer or his agent, the remainder of goods may be stopped in transit. But if such part delivery has been given in such circumstances as to show an agreement to give up possession of the whole of the goods the transit comes to an end at the time of part delivery.