How long can an unpaid seller retain possession of the goods under lien?
A. Until the buyer pays for the goods
B. Until the end of the seller’s financial year
C. For a maximum of 30 days
Answer: A
Answer Explanation:
When a seller delivers goods to a buyer, the seller expects that the buyer will pay for those goods within a reasonable timeframe. In such a situation, the seller becomes an unpaid seller when the buyer does not pay for the goods despite the delivery. A lien is a legal right that allows the seller to retain possession of the goods until the buyer pays for them.
A seller who has not been paid for their goods can retain possession of the goods as security for payment of the purchase price by using the right of lien. As long as the seller has not received payment for the goods, the lien applies even if the buyer has already taken possession. The buyer can’t take possession of the goods until they pay for them.
It is important to note that the right of lien is not absolute and has certain limitations. For example, the unpaid seller only has a right of lien if he or she is in possession of the goods when the goods are in transit. In addition, the right of lien applies only to goods that have been delivered to the buyer. Unpaid sellers have the right to stop the transit of their goods. It does not apply to goods that have not yet been delivered or services that have been provided.
The unpaid seller must prove their entitlement to the purchase price in order to exercise the lien right. This means that the goods must be delivered to the buyer and the buyer does not have the money to pay for them. Unpaid sellers can retain possession of the goods until the buyer pays for them if they can establish these facts. A seller who has not been paid may also be entitled to recoup any expenses they have incurred as a result of the buyer’s failure to pay, such as storage fees.
When unpaid sellers do not receive payment, they are protected by the right of lien, which allows them to retain possession of the goods until the payment is received. When exercising this right, however, the seller should act reasonably. In order to exercise the right of lien, the unpaid seller must provide notice to the buyer and give the buyer a reasonable period of time to pay. Unpaid sellers may be able to take further action, such as the right to resell, if the buyer does not pay within a reasonable amount of time.
The right of lien is also subject to any specific provisions set forth in the sale agreement between the parties, so unpaid sellers should understand this. An unpaid seller must comply with specific provisions pertaining to the right of lien, such as payment terms, delivery dates, and dispute resolution, if the sale agreement includes any specific provisions related to the right of lien.
A lien is an important legal right that allows unpaid sellers to retain possession of goods until they are paid by the buyer. In order to exercise this right, unpaid sellers must act reasonably. In order to ensure that unpaid sellers receive payment for the goods they have delivered, they must understand the lien right and comply with any specific provisions in the sale agreement.
MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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