The right of a creditor to detain goods until money owed to that creditor is paid. Of the various categories of lien, the most relevant to Trade Finance is the common law (or possessory) lien and the contractual lien. The former arises by operation of law whereas the latter is created by contract. Like a Pledge, a lien is a form of possessory Security. Unlike a Pledge:
- A lien does not give rise to a right of sale of the goods, and
- The goods are deposited not for Security but for some other purpose (eg storage).