In the following cases, an unpaid seller loses his lien on the goods:
1. When he unconditionally, i.e., without reserving the right of disposal, delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer.
2. When the buyer or his agent lawfully obtains possession of the goods.
3. When the seller waives his right of lien, for example, when the seller extends the period of credit. Similarly, when the seller recognizes the rights of a subsequent buyer.
ADVERTISEMENTS:
It should be noted that the unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that he has obtained a decree for the price of the goods [Sec. 49(2)].
These two rights are independent, therefore, his right of lien is not lost by obtaining a decree.
2. Right of stoppage in transit (Sec. 50 to 52):
Right of stoppage in transit is an extension of the right of lien. It is because of this reason it is remarked that the right of lien is a right to retain possession, whereas right of stoppage in transit is a right to regain possession. A seller who has lost his right to retain possession may regain possession of goods if the goods are in transit and the buyer has become insolvent in the meantime. He may hold the goods until the price is paid or tendered.