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Contractual Lien in Supplier Chain - Liens against non-direct customers?

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  • Contractual Lien in Supplier Chain - Liens against non-direct customers?


    I've been asked by a customer what would happen in the following scenario:

    This is related to renting server space from a datacentre though I'll include a more familiar analogy after.

    Company A runs a datacentre and rents Company B lots of server space for Company B's equipment. Part of the contract allows company A to put a lien over the equipment in the event company B fails to pay etc...
    Company B also resells some of this space to other companies (lets say Company C). Company C has also installed their own equipment in the space company B is renting from company A, company C has a contract with company B but nothing to company A.
    Company B fails to pay company A. Company A blocks company B and C access to the equipment and puts a lien on it.

    Company C has no contracts with company A and owes them no money, assuming company C can prove ownership of their equipment as well as their contract to company B, what can they do to force company A to regain possession of their equipment?


    Another example would be a self storage company. Lets say a customer stopped paying for storage but a friend of the customer had items belonging to them in it, what recourse do they have to get their property back assuming they can prove ownership?

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  • #2
    This was posted on 30th October 2019 but is still relevant.

    Whilst I fully understand your question, it concerns me that this is the second post I have answered today that sounds like a question from an exam paper.

    I hope Im not doing your homework for you?

    Company A does not need a contract with B / C or anyone else. If equipment is on premises owned by A and A is owed money A is perfectly entitled to put a lien on any goods or chattels A thinks fit.

    ​​Same answer for the storage company, paying what is owed will release the goods from the lien.

    The storage company wont care who pays their outstanding account but without payment the lien would stand.

    Both a server facility and a storage facility would be secure buildings which helps.

    Im sure my answer could be challenged in a court of law but as covid has backed up the civil court system for years to come I would take my chances and I would advise A to do the same.
    Last edited by EnglandPi; 6th August 2021, 01:27:AM.


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