contractual lien
A contractual lien is a lien created by agreement between parties rather than arising from common law or statutes. It functions as a contractual arrangement that grants a security interest in property to one party, such as in the case of a mortgage. In this context, the agreement itself creates a legally enforceable right in the property, even though it originates purely from the parties’ consent.
Some authorities contend that the term “contractual lien” is inaccurate, since a lien traditionally exists without the property owner’s consent. Others maintain that the term is useful for describing security interests that arise solely by contract.
Example: Pou Chen Corp. v. MTS Products, 183 Cal.App.4th 188, 107 Cal. Rptr. 3d 57 (2010).
[Last reviewed in August of 2025 by the Wex Definitions Team]
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