If the buyer is insolvent,
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the seller cannot exercise the right of stoppage in transit
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the seller cannot exercise the right of lien
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the seller can exercise the right of lien
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the seller can exercise the right of stoppage in transit
Reveal answer
Fill a bubble to check yourself
C
Correct answer
Explanation
When a buyer becomes insolvent, the seller can exercise the right of lien - the right to retain goods that are still in their possession until the price is paid. This unpaid seller's right protects the seller against the buyer's insolvency. Option A is incorrect because stoppage in transit may also be available. Option B wrongly denies the lien right. Option D mentions stoppage in transit, which is also available, but the question focuses on lien as the correct answer.