Multiple choice

Which of the following rights of an unpaid-seller can be exercised only when the buyer has become insolvent and not otherwise?

  1. Right of lien

  2. Right of Re-sale

  3. Right of Stoppage in transit

  4. Right to Sue

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

The unpaid seller's right of stoppage in transit (Section 50) becomes available only upon the buyer's insolvency. Unlike other rights such as lien (Section 47) or re-sale (Section 54), stoppage in transit specifically requires that the buyer has become insolvent as a precondition for its exercise.