Lien | Practical Law

Lien | Practical Law

Lien

Lien

Practical Law ANZ Glossary w-013-2563 (Approx. 2 pages)

Glossary

Lien

A right that entitles a party to hold on to assets in their possession pending payment of a debt owed. A lien can arise in the following ways:
  • In equity.
  • From the operation of law (a legal or common law lien).
  • Bargained for, or extended, as a matter of contract (a contractual lien).
  • Created by statute (a statutory lien).
It does not confer on the lien holder an automatic right to sell the assets.
In trust law, a trustee with a right of indemnity against the trust assets has an equitable lien on the assets that may continue even if the assets are no longer in the trustee's possession (in which case it is known as a non-possessory lien).