RIGHT OF LIEN VS RIGHT OF STOPPAGE IN TRANSIT

• DIFFERENCE BETWEEN RIGHT OF LIEN AND RIGHT OF STOPPAGE
• SALE OF GOODS ACT 1930
• SHASHI AGGARWAL ECONOMICS AND LAW CLASSES

• RIGHT OF UNPAID SELLER AGAINST THE GOODS
• RIGHT OF LIEN (46(1)(a),47 to 49

1. LIEN IS THE RIGHT TO RETAIN POSSESSION OF GOODS UNTIL THE PAYMENT OF PRICE TO THE UNPAID SELLER OF THE GOODS WHO HAS POSSESSION OF THEM :
2. WHERE THE GOODS HAVE BEEN SOLD WITHOUT ANY STIPULATION TO CREDIT
3. BUT THE TERMS OF CREDIT HAS EXPIRED
4. WHERE THE BUYER BECOMES INSOLVENT

• RULES REGARDING LIEN

1. THE SELLER MAY EXERCISE HIS RIGHT OF LIEN IN SPITE THAT HE IS POSSESSION OF THE GOODS AS AGENT OR BAILEE FOR THE BUYER . IF HE LOSES THE POSSESSION OF THE GOODS,HE LOSES THE RIGHT OF LIEN
2. LIEN DEPENDS ON ACTUAL POSSESSION AND NOT ON TITLE
3. THE POSSESSION OF THE GOODS BY THE SELLER MUST NOT EXPRESSLY EXCLUDE RIGHT OF LIEN
4. THE LIEN CAN BE EXERCISED BY THE UNPAID SELLER ONLY FOR THE PRICE AND NOT FOR ANY OTHER CHARGES SUCH AS WAREHOUSE OR DOCK CHARGES
5. WHERE AN UNPAID SELLER HAS MADE PART DELIVERY OF THE GOODS,HE MAY EXERCISE HIS RIGHT OF LIEN ON THE REMAINDER OF THE GOODS TILL HE IS PAID FOR THE GOODS ALREADY DELIVERED AND THE GOODS YET TO BE DELIVERED.

• RIGHT OF STOPPAGE ( SEC 50-52)

1. THE RIGHT TO STOPPAGE MEANS THE RIGHT TO STOP FURTHER TRANSIT OF THE GOODS TO RESUME POSSESSION
2. THE SELLER MUST BE UNPAID
3. HAVE PARTED WITH THE POSSESSION OF THE GOODS AND THE BUYER MUST NOT HAVE ACQUIRED IT
4. THE BUYER MUST BE INSOLVENT
5. THE PROPERTY MUST HAVE PASSED FROM THE SELLER TO THE BUYER
6. ONLY AVAILABLE WHEN THE GOODS ARE NEITHER IN POSSESSION OF THE SELLER NOR THAT OF BUYER BUT ARE IN THE POSSESSION OF A MIDDLEMAN FOR THE PURPOSE OF TRANSMISSION TO THE BUYER
7. THE RIGHT OS STOPPAGE IN TRANSIT IS AN EXTENSION OF THE RIGHT OF LIEN BUT IT ARISES ONLY ON THE INSOLVENCY OF THE BUYER AND WHEN THE GOODS ARE IN TRANSIT.

• DIFFERENCE BETWEEN RIGHT OF LIEN AND RIGHT OF STOPPAGE
• RIGHT OF LIEN

1.     CAN BE EXERCISED WHEN THE BUYER IS ABLE TO PAY BUT DOES NOT PAY

2.     CAN BE EXERCISED ON THE GOODS WHICH ARE IN ACTUAL OR CONSTRUCTIVE POSSESSION OF THE SELLER

3.     THE RIGHT OF LIEN COMES TO AN END WHEN THE POSSESSION OF THE GOODS IS SURRENDERED BY THE SELLER

4.     RETAIN  POSSESSION

• RIGHT OF STOPPAGE

1. ARISES ONLY WHEN THE BUYER HAS BECOME INSOLVENT
2. CAN BE EXERCISED WHEN THE GOODS ARE IN POSSESSION OF THE MIDDLEMAN AND SELLER HAS PARTED WITH THE POSSESSION OF THE GOODS
3. COMMENCES WHEN THE GOODS HAVE LEFT THE POSSESSION OF THE SELLER AN CONTINUES UNTIL THE BUYER OR HIS AGENT HAS ACQUIRED THE POSSESSION
4. IS TO REGAIN OR RESUME POSSESSION