Liens — a powerful remedy, but there are dangers too

By Jane Hobbs

The exercise of a contractual lien can be an incredibly powerful and effective weapon for an unpaid freight forwarder to use and can have disastrous results for cargo interests. But there are dangers for those who get it wrong.

It is usual to find a lien clause in contracts for the carriage of goods and in freight-forwarding contracts. A good example is found in the British International Freight Association (BIFA) Standard Trading Conditions.

In essence, the forwarder has a right to detain goods in its possession until it has been paid all sums due from its customer and/or the owner of the goods, whether in respect of that shipment or previous shipments. In addition to the passive right of detention, most lien clauses also entitle the forwarder, on giving a defined period of notice, to sell, dispose of or deal with the goods and to use the proceeds to pay towards the sums due. Cargo interests often pay up to get goods released from a lien…

Click on the link below to read the rest of the Gateley briefing.

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