Factor's Lien Law and Legal Definition

Factor's lien is a lien against property held on consignment by a factor, conferring the right to retain possession of the property until the factor receives full payment from the principal. Factor's lien is available on:

1) a principal’s goods in Factor's possession,

2) proceeds of such goods and securities taken for the price, for advances, expenses, and commissions,

3) general balance of principal’s accounts,

4) debts connected with the agency, which the factor has undertaken as surety or for the accommodation of the principal, and

5) to interest on subsequent advances.

However, factor’s lien does not extend to debts outside the agency.