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Simple English definitions for legal terms
STOPPAGEIN TRANSITU
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A quick definition of STOPPAGEIN TRANSITU:
Term: STOPPAGE IN TRANSITU
Definition: Stoppage in transitu is a legal term that refers to the right of a seller to stop the delivery of goods that are in the process of being transported to the buyer. This right arises when the buyer has not paid for the goods, and the seller has reason to believe that the buyer will not be able to pay for them. The seller can then take possession of the goods and sell them to someone else to recover the cost of the goods. This right is important for sellers to protect themselves from potential losses due to non-payment by buyers.
A more thorough explanation:
Definition: Stoppage in transitu refers to the right of a seller to stop the delivery of goods that are in the process of being transported to the buyer. This right arises when the buyer has become insolvent or has breached the contract of sale.
Example: A seller ships a shipment of goods to a buyer, but before the goods arrive, the seller learns that the buyer has become insolvent. The seller can exercise the right of stoppage in transitu and demand that the carrier hold the goods until the seller can arrange for their return or resale.
Explanation: This example illustrates how stoppage in transitu can be used to protect the seller's interests when the buyer is unable to fulfill their obligations under the contract of sale. By exercising this right, the seller can prevent the goods from being delivered to the buyer and potentially being lost or damaged. Instead, the seller can take steps to recover the goods or resell them to another buyer.