400.2-702. Seller's remedies on discovery of buyer's insolvency. - Missouri Statutes

Seller's remedies on discovery of buyer's insolvency.

400.2-702. (1) Where the seller discovers the buyer to beinsolvent he may refuse delivery except for cash includingpayment for all goods theretofore delivered under the contract,and stop delivery under this article (section 400.2-705).

(2) Where the seller discovers that the buyer has receivedgoods on credit while insolvent he may reclaim the goods upondemand made within ten days after the receipt, but ifmisrepresentation of solvency has been made to the particularseller in writing within three months before delivery the ten-daylimitation does not apply. Except as provided in this subsectionthe seller may not base a right to reclaim goods on the buyer'sfraudulent or innocent misrepresentation of solvency or of intentto pay.

(3) The seller's right to reclaim under subsection (2) issubject to the rights of a buyer in ordinary course or other goodfaith purchaser or lien creditor under this article (section400.2-403). Successful reclamation of goods excludes all otherremedies with respect to them.

(L. 1963 p. 503 § 2-702)

(1978) Lien creditor is not a purchaser for value under § 400.2-403, and thus acquired no right as against a seller seeking a reclamation of goods under subsection 2 of this section. Matter of PFA Farmers Market Association (CA Mo.), 583 F.2d 992.