What is a Lien?

A company can put a contractual Lien on a debtor's property that is in their possession, which means they have the right to hold/sell the goods in the event of an unsatisfied debt.

For example, a shipping company may include a lien clause in their contract to the effect of the following:

'The Company will have a general lien on the property of the debtor which are in, or come into possession of the company. The Company has the right to sell the property at auction if the debt has not been satisfied within 14 days notice of exercising of the lien....."

Related Procurement Topics:
 
What is Force Majeure?

What is an Indemnity?

What is 'Time is of the Essence'?

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