Site navigation

S still has possession of goods sold to B, and the price has not been paid in full. Under section 47 of the Sale of Goods Act, 1930, in which case can S NOT exercise a lien on the goods?

Question and options

S still has possession of goods sold to B, and the price has not been paid in full. Under section 47 of the Sale of Goods Act, 1930, in which case can S NOT exercise a lien on the goods?

  1. The sale was on 30 days' credit, 10 days have passed and B is insolvent

  2. The sale was for cash, B has paid half the price and B is solvent

  3. The sale was on 30 days' credit, 10 days have passed and B is solvent

  4. The sale was on 30 days' credit, 40 days have passed and B is solvent

Answer and explanation

Correct answer: C - The sale was on 30 days' credit, 10 days have passed and B is solvent

Section 47 of the Sale of Goods Act, 1930 gives an unpaid seller in possession a lien where the goods were sold without credit, where they were sold on credit and the term has expired, or where the buyer becomes insolvent. A solvent buyer whose credit term is still running meets none of these grounds. A seller paid only part of the price is still an unpaid seller under section 45, so the lien survives part payment.

Practice for these exams

Related exam syllabi

More solved explanations in Rights of the unpaid seller