stoppage in transit

Stoppage in Transit

The right of a seller to prevent the delivery of goods to a buyer after such goods have been delivered to a common carrier for shipment.

Cross-references

Sales Law.

stoppage in transit

stopping goods in the course of their delivery at a distance. 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. By stopping the goods in the course of their transit, the seller puts the carrier under an obligation to redeliver the goods to him and thereby re-acquires the right of possession of the goods. The exercise of the right of stoppage in transit does not in itself terminate the contract of sale; it merely prevents the buyer from obtaining possession of the goods and puts the seller in a position in which he can effectively exercise his statutory power of resale. Goods are deemed to be in the course of transit from the time when they are delivered to a carrier or other bailee or custodier for the purpose of transmission to the buyer until the buyer or his agent in that behalf takes delivery of them from the carrier or other bailee or custodier. If the goods are subject to rejection by the buyer and the carrier or other bailee or custodier continues in possession of them, the transit is not deemed to be at an end, even if the seller has refused to receive them back.