ICANBusiness LawSale of Goods and Hire Purchase2024

Zenon Ltd sold 500 bags of flour to Danladi Enterprises on 60 days credit terms. While the goods were in transit in the hands of an independent haulage carrier, Zenon Ltd discovered that Danladi Enterprises had become insolvent. Zenon Ltd immediately ordered the carrier not to deliver the goods to Danladi Enterprises. Which of the following conditions MUST exist under Sections 44–46 of the Sale of Goods Act 1893 for Zenon Ltd to validly exercise the right of stoppage in transitu?

AThe buyer must have defaulted on payment for at least 90 calendar days prior to the notice
BThe buyer must be insolvent, and the goods must still be in the course of transit before reaching the buyer's possessionCORRECT
CProperty (title) in the goods must not have passed to the buyer under any circumstances
DZenon Ltd must first obtain a mandatory injunction from the Federal High Court restraining delivery
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
Under Section 44 of the Sale of Goods Act 1893, an unpaid seller who has parted with possession of the goods has the right of stopping them in transitu when the buyer becomes insolvent. This right exists while the goods are in transit, irrespective of whether property in the goods has already passed to the buyer.
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