Multiple choice

In an agreement to sell, if the buyer becomes insolvent and has not yet paid the price, the seller is not bound to part with the goods until he is paid for.

  1. True

  2. False

  3. Partly true

  4. Cannot say

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When a buyer becomes insolvent before paying, the unpaid seller retains the right to withhold delivery until payment is received. This protects sellers from delivering goods to insolvent buyers who may not be able to pay. The seller's lien or right of retention is triggered by buyer insolvency.