What Is Carrier's Lien?

Carrier's lien refers to the legal right of a provider of transportation services to retain cargo shipped as collateral for payment of the transportation services rendered.

A Carrier’s Lien is a legal right that grants providers of transportation services the authority to retain possession of shipped cargo until payment for those services has been fully rendered. This lien serves as collateral for the transportation fee and ensures that carriers are compensated for their services.

Legal Framework

Common Law

Historically, common law provided the foundation for carrier’s lien, recognizing the need for carriers to secure payment. It established that a carrier’s lien is possessory, meaning the lien is only valid while the carrier maintains possession of the cargo.

Statutory Law

Various jurisdictions have codified carrier’s lien into their statutory laws, providing specific guidance and regulations for its enforcement.

Uniform Commercial Code (UCC) in the U.S.

For example, under the U.S. Uniform Commercial Code (UCC), section 7-307 specifically addresses carrier’s lien:

$$ 7-307: Carrier's Lien (1) A carrier has a lien on the goods covered by a bill of lading for charges subsequent to the date of its receipt of the goods for storage or transportation including demurrage and terminal charges and expenses necessary for the preservation of the goods or incident to their transportation or reasonably incurred in their sale pursuant to law. (2) A lien for charges and expenses under subsection (1) on goods must be preferred to all other liens except those for taxes and on those charges enlarged by a sale of the goods enforced after the claim for those charges has accrued. $$

Types of Carrier’s Lien

General Carrier’s Lien

A general lien allows the carrier to retain the cargo for any debt owed by the owner of the goods, not limited to the cost of transportation of that specific cargo.

Special Carrier’s Lien

A special lien permits the carrier to hold the specific goods being transported until the related transportation charges are settled.

Applicability and Conditions

Conditions for Enforcement

The following conditions must be met for a carrier to enforce a lien:

• Possession of Goods: The carrier must have possession of the goods.
• Debt Relating to Carriage: The debt must be in relation to the transportation services rendered.
• Non-Payment: The payment for the transportation must be overdue or in default.

Termination of Lien

The carrier’s lien terminates if the carrier voluntarily relinquishes possession of the goods or the debt is settled.

Examples and Practical Application

Example Scenario

Consider a freight shipping company that transports goods from a manufacturer to a retailer. Upon delivery, the retailer fails to pay the agreed transportation fee. The shipping company can enforce a carrier’s lien on the goods until payment is made.

Historical Context

Development Through Commerce Expansion

The concept of carrier’s lien has evolved with the expansion of commerce and trade, particularly during the Industrial Revolution, where the scale and distance of trade necessitated such legal protections for carriers.

Related Terms

• Bailee’s Lien: A broader category of lien that arises when a person or entity in lawful possession of goods (bailee) retains them until payment is received.
• Warehouseman’s Lien: Similar to a carrier’s lien, but applies to those providing storage services rather than transportation.

FAQs

Can a carrier’s lien be waived?

Yes, a carrier’s lien can be waived through an explicit agreement between the carrier and the consignor.

Does a carrier’s lien apply if the goods are damaged?

Yes, a carrier’s lien can still apply to damaged goods, provided that the damage occurred after the lien was established and possession was retained.

How does a carrier enforce their lien?

A carrier can enforce their lien by refusing to deliver the goods until the transportation charges are paid. In some jurisdictions, after a specified period, they may sell the goods to recover the costs.

References

• UCC Section 7-307, “Carrier’s Lien”
• Common Law Principles on Carrier’s Lien
• Legal Frameworks in Various Jurisdictions

Summary

A Carrier’s Lien is an important legal mechanism that ensures transportation service providers are compensated for their services by allowing the retention of shipped goods as collateral. It follows a well-defined legal framework under common and statutory laws, ensuring the carrier’s right to payment while balancing the interests of all parties involved in the transportation process. Understanding carrier’s lien is crucial for professionals in transportation, shipping, and related legal fields.