Multiple choice

A sold 1000 tins of oil to B without appropriating any particular oil to the contract. B sold 600 tins out it to C and gave delivery order addressed to A. C lodged the delivery order with A requesting him to “await” his orders. Meanwhile, B became insolvent and thus A became the unpaid seller.

  1. A can exercise his right of lien and refuse to make delivery to C.

  2. A cannot exercise his right of lien and refuse to make delivery to C.

  3. C has claim over the goods in possession of A.

  4. None of these
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A Correct answer
Explanation

As unpaid seller, A retains right of lien on goods in possession. Even though C holds delivery order, B's insolvency before delivery allows A to exercise lien against C, as property didn't pass to B or C.

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