§ 336.2-705 — Seller's Stoppage of Delivery in Transit or Otherwise
Plain-Language Summary
A seller can stop delivery of goods in transit if they discover the buyer is insolvent or in breach. For insolvency, the seller can stop any delivery; for breach, only carload, truckload, or larger shipments. The right to stop ends when the buyer gets possession, the carrier acknowledges the buyer's rights, or a negotiable document of title is negotiated to the buyer.
336.2-705 SELLER’S STOPPAGE OF DELIVERY IN TRANSIT OR OTHERWISE.
(1) The seller may stop delivery of goods in the possession of a carrier or other bailee on discovering the buyer to be insolvent (section 336.2-702) and may stop delivery of carload, truckload, planeload or larger shipments of express or freight when the buyer repudiates or fails to make a payment due before delivery or if for any other reason the seller has a right to withhold or reclaim the goods.
(2) As against such buyer the seller may stop delivery until
(a) receipt of the goods by the buyer; or
(b) acknowledgment to the buyer by any bailee of the goods except a carrier that the bailee holds the goods for the buyer; or
(c) such acknowledgment to the buyer by a carrier by reshipment or as a warehouse; or
(d) negotiation to the buyer of any negotiable document of title covering the goods.
(3)(a) To stop delivery the seller must so notify as to enable the bailee by reasonable diligence to prevent delivery of the goods.
(b) After such notification the bailee must hold and deliver the goods according to the directions of the seller but the seller is liable to the bailee for any ensuing charges or damages.
(c) If a negotiable document of title has been issued for goods the bailee is not obliged to obey a notification to stop until surrender of possession or control of the document.
(d) A carrier who has issued a nonnegotiable bill of lading is not obliged to obey a notification to stop received from a person other than the consignor.
History:
1965 c 811 s 336.2-705; 1986 c 444; 2004 c 162 art 5 s 11
History: History: 1965 c 811 s 336.2-705; 1986 c 444; 2004 c 162 art 5 s 11