§ 25-2-702. Seller's remedies on discovery of buyer's insolvency. - North Carolina Statutes

§25‑2‑702.  Seller's remedies on discovery of buyer's insolvency.

(1)        Where the sellerdiscovers the buyer to be insolvent he may refuse delivery except for cashincluding payment for all goods theretofore delivered under the contract, andstop delivery under this article (G.S. 25‑2‑705).

(2)        Where the sellerdiscovers that the buyer has received goods on credit while insolvent he mayreclaim the goods upon demand made within ten days after the receipt, but ifmisrepresentation of solvency has been made to the particular seller in writingwithin three months before delivery the ten‑day limitation does notapply. Except as provided in this subsection the seller may not base a right toreclaim goods on the buyer's fraudulent or innocent misrepresentation of solvencyor of intent to pay.

(3)        The seller's rightto reclaim under subsection (2) is subject to the rights of a buyer in ordinarycourse or other good faith purchaser under this article (G.S. 25‑2‑403).Successful reclamation of goods excludes all other remedies with respect tothem. (1965, c. 700, s. 1; 1967, c. 562, s. 1.)