(a) A lessor that discovers that the lessee is insolvent may refuse to deliver the goods.
(b) Subject to subsection (d) of this section, the lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessee is insolvent or repudiates or fails to make a payment due before delivery, whether for rent, security or otherwise under the lease contract or if, for any other reason, the lessor has a right to withhold or reclaim the goods.
(c) As against a lessee under subsection (b) of this section, the lessor may stop delivery until:
(1) Receipt of the goods by the lessee;
(2) Acknowledgment to the lessee by any bailee of the goods, other than a carrier, or a carrier by reshipment or as a warehouse, that the bailee holds the goods for the lessee; or
(3) Acknowledgment to the lessee by a carrier by reshipment or as a warehouse that the carrier holds the goods for the lessee.
(d) If notice to stop delivery has been given, the following rules apply:
(1) The notice must afford the carrier or bailee a reasonable opportunity to prevent delivery of the goods.
(2) After notice, the carrier or bailee shall hold and deliver the goods according to the directions of the lessor. The lessor is liable to the bailee or carrier for any resulting charges or damages. A carrier or bailee need not stop delivery if the lessor does not provide indemnity for charges or damages upon the carrier's or bailee's demand.
(3) A carrier or bailee that has issued a nonnegotiable document need not obey a notice to stop received from a person other than the person named in the document as the person from which the goods have been received for shipment or storage.
(P.A. 02-131, S. 72; P.A. 04-64, S. 56.)
History: P.A. 04-64 amended Subsec. (c)(2) and (3) by replacing “warehouseman” with “warehouse” to conform to revisions made to article 7 by the same act.
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