A right which entitles a party to hold on to assets in his possession pending payment of a debt owed. It can arise in the following ways:
From the operation of law (a legal or common law lien).
Bargained for, or extended, as a matter of contract (a contractual lien).
Created by statute (a statutory lien).
It does not confer on the lien holder an automatic right to sell the assets.
In trust (www.practicallaw.com/4-107-7416) law, a trustee (www.practicallaw.com/8-107-7419) with a right of indemnity (www.practicallaw.com/5-107-6256) against the trust assets has an equitable lien on the assets that may continue even if the assets are no longer in the trustee's possession (in which case it is known as a non-possessory lien). For more information, see Practice note, Protecting trustees who part with trust assets: overview: Protection under trust law: right of indemnity and equitable lien (www.practicallaw.com/2-385-8026).