Also known as: withholds delivery · withholding delivery · withheld delivery · stop delivery
Written by attorneys · grounded in primary & secondary sources — see below
A remedy available to a seller of goods that permits the seller to refuse to deliver goods to a buyer who has breached the contract by failing to pay or by repudiating.
Coastal Media had already shipped three batches of lighting rigs to Pine Stage and received payment. After the buyer's show was canceled, Pine Stage stopped payment on the fourth batch and declared it would accept no further deliveries. Coastal Media therefore refused to release the fifth batch still at its facility.
A wholesaler contracted to sell 500 units of electronics to a retailer with payment due on tender of each lot. After the first two lots were paid for, the retailer failed to pay for the third lot when it became due. The wholesaler withheld the remaining undelivered units until payment was received.
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A manufacturer agreed to supply custom parts to a buyer over six months. Two months in, the buyer notified the manufacturer that it would accept no further shipments and would source elsewhere. The manufacturer immediately stopped production and withheld all remaining undelivered parts.
A seller may withhold delivery when the buyer fails to make a payment due on or before delivery or repudiates with respect to part or the whole of the contract. The remedy applies to goods directly affected and, if the breach is of the whole contract, to the entire undelivered balance.
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No. When governmental regulation renders the agreed payment method unavailable, the seller may withhold delivery only until the buyer tenders a commercially substantial equivalent. If the buyer supplies such a substitute, the seller must perform.
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Payment by the means or in the manner provided by the regulation discharges the buyer's obligation unless the regulation is discriminatory, oppressive, or predatory. The seller's right to withhold or stop delivery therefore does not arise once delivery has occurred.
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…placed with Austin the order for all 40 parts needed under Loral's second Navy contract. Shortly thereafter, Austin did, indeed, stop delivery. After contacting 10 manufacturers of precision gears and finding none who could produce the parts in time to meet its commitments to the Navy, Loral acceded to Austin's demands; in a…