Legal Definitions - STOPPAGEIN TRANSITU

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.