Seller's Stoppage of Delivery in Transit or Otherwise

1. Law
2. Georgia Code
3. Commercial Code
4. Sales
5. Remedies
6. 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 when he discovers the buyer to be insolvent (Code Section 11-2-702) 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:

1. Receipt of the goods by the buyer; or
2. Acknowledgment to the buyer by any bailee of the goods except a carrier that the bailee holds the goods for the buyer; or
3. Such acknowledgment to the buyer by a carrier by reshipment or as a warehouse; or
4. Negotiation to the buyer of any negotiable document of title covering the goods.

(a)To stop delivery the seller shall so notify as to enable the bailee by reasonable diligence to prevent delivery of the goods.

After such notification the bailee shall 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.

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.

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.

(Code 1933, § 109A-2 - 705, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2010, p. 481, § 2-12/HB 451.)

The 2010 amendment, effective May 27, 2010, substituted "a warehouse" for "warehouseman" in paragraph (2)(c); substituted "shall" for "must" in paragraphs (3)(a) and (3)(b); and inserted "of possession or control" in paragraph (3)(c). See the Editor's notes for applicability.

Editor's notes.

- Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010.

Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010.

RESEARCH REFERENCES

Am. Jur. 2d.

- 13 Am. Jur. 2d, Carriers, § 473. 67A Am. Jur. 2d, Sales, §§ 1051-1072. 78 Am. Jur. 2d, Warehouses, § 203.

6 Am. Jur. Pleading and Practice Forms, Commercial Code, § 2:675.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 2-705.

ALR.

- When right of stoppage in transitu terminates, 7 A.L.R. 1374.

Right of seller to rescind or refuse further deliveries upon the buyer's failure to pay for instalments, 14 A.L.R. 1209; 75 A.L.R. 609.

Measure of damages for buyer's repudiation of or failure to accept goods under executory contract, 44 A.L.R. 215; 108 A.L.R. 1482.

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