Ontario Barrister and Solicitor Practice Exam

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How can a seller exercise their unpaid seller's lien?

  1. By repossessing the sold goods immediately

  2. By taking legal action against the buyer

  3. By giving notice to the buyer or an affiliate of the buyer

  4. By publicly announcing the buyer's default

The correct answer is: By giving notice to the buyer or an affiliate of the buyer

A seller can exercise their unpaid seller's lien by giving notice to the buyer or an affiliate of the buyer. This means that the seller must inform the buyer or someone closely related to the buyer, such as a family member or business partner, that they have a right to keep the goods until payment is received. Option A, repossessing the goods immediately, is incorrect because the seller must first give notice before repossessing the goods. Option B, taking legal action, is also incorrect because the seller must give notice before taking legal action. Option D, publicly announcing the buyer's default, is incorrect because giving notice is the proper way to assert the lien, rather than publicly shaming the buyer.

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