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CSEET · Business Laws and Management · Elements of Law relating to Sale of Goods

Under the Sale of Goods Act, 1930, an unpaid seller has a lien on the goods for the price. When can this lien be exercised?

The unpaid seller's lien can be exercised while he remains in possession of the goods. It applies for the price even if property has passed to the buyer, and insolvency is not required, unlike stoppage in transit.

  1. AWhile the seller is in possession of the goodsCorrect
  2. BOnly after the property in the goods has not passed to the buyer
  3. COnly after the buyer becomes insolvent
  4. DAfter the goods have been delivered to a carrier for transmission to the buyer

Explanation

Section 46(1)(a) gives the unpaid seller a lien on the goods for the price while he is in possession of them, even though property may have passed to the buyer. It does not depend on insolvency, which is needed only for stoppage in transit. Once goods go to a carrier, the seller no longer possesses them.

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