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How does a common-law carrier's lien help secure payment of freight charges?

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In common-law jurisdictions, a common carrier secures payment of freight charges through a carrier’s lien, which grants the carrier the legal right to retain possession of the transported goods until the earned freight is paid.12

This mechanism functions as a form of security by allowing the carrier to withhold delivery, thereby incentivizing the consignee to settle outstanding charges. Under standard common law, this lien is possessory only; the carrier is not permitted to sell or use the goods. However, the scope of this right can be modified by the parties involved:12

  • Active Lien: Parties may contractually agree to an active lien, which grants the carrier the additional authority to sell the goods to satisfy unpaid freight debts.12
  • General Lien: Parties may agree to a general lien, extending the carrier's security to cover debts beyond the specific pending freight charges.2
  • Waiver: Conversely, parties may agree that the carrier shall have no lien at all.2

Once a lien is exercised, the carrier assumes the duties of a bailee, remaining responsible for the preservation of the goods.2