Alabama § 7-2-702 Seller’s Remedies on Discovery of Buyer’s Insolvency

Alabama Statutes

§ 7-2-702 — Seller’s Remedies on Discovery of Buyer’s Insolvency

Alabama § 7-2-702

Title 7Commercial Code

Art. 2Sales

Part 7Remedies

This text of Alabama § 7-2-702 (Seller’s Remedies on Discovery of Buyer’s Insolvency) is published on Counsel Stack Legal Research, covering Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ala. Code § 7-2-702 (2026).

Text

(1)Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash, including payment for all goods theretofore delivered under the contract, and stop delivery under this article (Section 7-2-705).

(2)Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within 10 days after the receipt, but if misrepresentation of solvency has been made to the particular seller in writing within three months before delivery the 10-day limitation does not apply. Except as provided in this subsection the seller may not base a right to reclaim goods on the buyer’s fraudulent or innocent misrepresentation of solvency or of intent to pay.

(3)The seller’s right to reclaim under subsection (2) is subject to

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(1) Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash, including payment for all goods theretofore delivered under the contract, and stop delivery under this article (Section 7-2-705).
(2) Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within 10 days after the receipt, but if misrepresentation of solvency has been made to the particular seller in writing within three months before delivery the 10-day limitation does not apply. Except as provided in this subsection the seller may not base a right to reclaim goods on the buyer’s fraudulent or innocent misrepresentation of solvency or of intent to pay.
(3) The seller’s right to reclaim under subsection (2) is subject to the rights of a buyer in ordinary course or other good faith purchaser or lien creditor under this article (Section 7-2-403). Successful reclamation of goods excludes all other remedies with respect to them.