Unpaid Seller

In addition to any contractual or statutory rights in respect of the goods, a carrier of goods may have the right to sell goods without consulting the owner. This arises where the carrier is an agent of necessity. For this agency to arise it must commercially impossible to contact the owner and there must be a real emergency, e.g. the goods are perishable. A carrier must obey the orders of the unpaid seller of the goods who may exercise the right of stoppage in transitu. This is specifically provided for under English law in Sections 44 – 46 of the Sale of Goods Act 1979.  Sections 44 – 46 of that Act provide the unpaid seller with a right to claim the goods in certain circumstances which are not available under Common Law, including the right of stoppage in transit. Section 45 provides that goods are deemed to be in transit from the time when they are delivered to the carrier or other bailee for the purpose of transmission to the buyer, until the buyer or his agent takes delivery of them. The Act also provides that when notice of stoppage in transit is given by the seller to the carrier or other bailee in possession of the goods, that person must redeliver the goods to, or according to the directions of, the seller. The expenses of redelivery, etc. must be borne by the seller. Problems arise when the unpaid seller wishes to exercise his right but has already forwarded a negotiable bill of lading to the consignee who claims ownership.  Greater complications arise if the reason for failing to pay is because the consignee has become bankrupt and the administrator of the receivers consider possession of the negotiable bill represents ownership.