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LSDefine

Simple English definitions for legal terms

factor's lien

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A quick definition of factor's lien:

Factor's lien is a way for someone who lends money to a business to make sure they get paid back. It means that they have a right to take some of the business's property if they don't get their money back. This is usually written in a contract, but sometimes it happens automatically. It used to be used a lot, but now there are other ways to make sure you get paid back.

A more thorough explanation:

Factor's lien is a type of security interest in property that allows agents and sometimes other parties to have their rights secured in property of a principal. This means that if the principal fails to pay the owed fees and expenses, the factor can recover them from the secured property.

For example, let's say a boat store allows companies to display their boats in their store for sale. The boat store may have an automatic lien over the boats from a company should they not pay the store owner their share from the prior boats sold. This means that if the company fails to pay the store owner, the store owner can recover the owed fees from the boats.

Factor's liens are covered under common law and sometimes statutory law depending on the state. Under both, the lien over the products from the principal can arise automatically if the relationship between the parties is one of a factor and principal. Many factor relationships, however, come about through contracts which may alter some but not all of the rights of the factor.

In the early-mid 20th century, factor’s liens began to be used as a method for creditors to have security interests in merchandise, goods, and equipment they funded for businesses. Today, most of the securities used for goods and equipment are covered under the UCC and other laws regarding securitization instead of the law of factors. Factor’s liens as a matter of common law and statutes in limited circumstances still exist to protect factors where their interest in property of a principal was not sufficiently documented in contract.

factor | factoring

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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