Distinguish between the right of lien and stoppage-in-transit.

Distinguishing Between Right of Lien and Stoppage-in-Transit

1. Right of Lien:

• Definition: The right of lien is a right granted to a seller or a creditor to retain possession of goods until payment or satisfaction of a debt is made.
• Nature: It is a possessory right, meaning it allows the holder to retain physical control of the goods.
• Purpose: The purpose of the right of lien is to secure payment or satisfaction of a debt owed to the holder.
• Application: It is generally applicable in cases where goods are in the possession of the holder (e.g., a pawnbroker holding goods as security).

2. Stoppage-in-Transit:

• Definition: Stoppage-in-transit is the right of a seller to stop the delivery of goods to the buyer while they are in the possession of a carrier or other third party.
• Nature: It is a right against the carrier or third party in possession of the goods, not against the goods themselves.
• Purpose: The purpose of stoppage-in-transit is to reclaim possession of the goods to prevent their delivery to the buyer.
• Application: It is applicable when the seller becomes aware of the buyer's insolvency or other circumstances that jeopardize the seller's right to payment.

Distinguishing Factors:

• Nature of Right: The right of lien is a possessory right, while stoppage-in-transit is a right against a third party in possession of the goods.
• Subject of Right: Lien applies to goods in the possession of the holder, while stoppage-in-transit applies to goods in the possession of a carrier or third party.
• Purpose: Lien is to secure payment or satisfaction of a debt, while stoppage-in-transit is to prevent delivery of goods to an insolvent buyer.

Conclusion:

In conclusion, the right of lien and stoppage-in-transit are both rights related to the possession of goods, but they differ in nature, subject, and purpose. The right of lien is a possessory right that allows the holder to retain goods until payment is made, while stoppage-in-transit is a right against a carrier or third party to reclaim goods in transit to prevent delivery to an insolvent buyer. Understanding these distinctions is essential for parties involved in transactions where these rights may be invoked.