A secret lien is a type of lien that is not publicly recorded and, therefore, is not easily discoverable by potential buyers or creditors. This lien is typically held by a vendor to ensure payment for goods delivered. Because it remains hidden from third parties, it can create complications in transactions involving the property or goods secured by the lien.
Secret liens are primarily used in commercial transactions, especially in the sale of goods. They may arise in various legal contexts, including contract law and commercial law. Vendors often utilize secret liens to protect their interests when they deliver goods on credit, ensuring they can claim payment even if the buyer attempts to sell the goods without settling their debt.
Here are a couple of examples of abatement:
Example 1: A furniture supplier delivers a set of office furniture to a company but retains a secret lien on the furniture until the company pays the full invoice. If the company sells the furniture without paying, the supplier can claim it back.
(hypothetical example)
| State | Secret Lien Treatment |
|---|---|
| California | Secret liens may be enforceable if properly documented in a private agreement. |
| New York | Secret liens are generally not recognized unless specific statutory requirements are met. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Difference |
|---|---|---|
| Public Lien | A lien that is recorded in public records. | Public liens are visible to potential buyers and creditors, unlike secret liens. |
| Mechanic's Lien | A lien placed by contractors or suppliers for unpaid work or materials. | Mechanic's liens are typically recorded and are not secret. |
If you believe you have a secret lien on goods or property, it's important to document your claim thoroughly. Consider using legal forms available through US Legal Forms to draft necessary agreements. If the situation is complex or involves disputes, seeking professional legal advice is recommended.
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A secret lien is a lien that is not recorded in public records, allowing a vendor to secure payment for goods delivered.