Which of the following have lien on goods in their possession until their commission is paid?
Answer Details
Factors have lien on goods in their possession until their commission is paid. Factors are intermediaries who buy accounts receivables from a company at a discount and then take responsibility for collecting the full amount of the invoice from the debtor. Factors may also advance funds to the company, using the accounts receivable as collateral. Since factors take on the risk of non-payment by the debtor, they retain control of the accounts receivable until they receive their commission or fee. This control includes a lien on the goods or products sold, which means that the factor has the right to sell or dispose of the goods if the company fails to pay the commission or fee.