CA Foundation Exam > CA Foundation Questions > Lien means _______a)to retain goods in his po...
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Lien means _______
- a)to retain goods in his possession
- b)rights to sell the goods
- c)right to purchase the goods
- d)right to destroy the goods
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Lien means _______a)to retain goods in his possessionb)rights to sell ...
Explanation:
- Lien: Lien refers to the right to retain goods in possession until a debt is paid off or an obligation is fulfilled by the debtor.
- Retention of goods: The holder of the lien can keep the goods until the debt is settled, even if the debtor wants the goods back.
- Not rights to sell: While the lienholder has the right to retain the goods, they do not have the automatic right to sell the goods to recover the debt.
- Not right to purchase: Lien does not give the holder the right to purchase the goods, only to retain them until the debt is cleared.
- Not right to destroy: The lienholder cannot destroy the goods as a means of recovering the debt, they must wait for payment or seek legal action.
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Lien means _______a)to retain goods in his possessionb)rights to sell ...
Understanding Lien
A lien is a legal right or interest that a lender or creditor has in the property of a borrower, typically used as security for a debt or obligation. In this context, the correct answer is option 'A': to retain goods in his possession.
Key Aspects of Lien:
- Definition: A lien allows a person or entity to retain possession of another's property until a debt owed by that owner is satisfied.
- Types of Lien: There are various types of liens, including possessory liens, which give the holder the right to keep possession of goods until payment is made.
- Possession: This is crucial—having possession of the goods means the lien holder can prevent the owner from reclaiming them until the obligation is fulfilled.
- Legal Right: A lien is enforceable by law, meaning that the lien holder can legally hold the property until the debt is settled.
Examples of Lien in Practice:
- Mechanic's Lien: If a mechanic repairs a vehicle but the owner does not pay, the mechanic may retain the vehicle until payment is made.
- Artisan's Lien: Similar to a mechanic's lien, an artisan who works on goods may retain those goods until the payment is received.
Conclusion:
Understanding liens is essential in legal and financial contexts as they provide creditors with a means to secure debts. The primary function of a lien is to allow the holder to retain possession of goods until the obligation is met, which is why option 'A' is the correct answer.
A lien is a legal right or interest that a lender or creditor has in the property of a borrower, typically used as security for a debt or obligation. In this context, the correct answer is option 'A': to retain goods in his possession.
Key Aspects of Lien:
- Definition: A lien allows a person or entity to retain possession of another's property until a debt owed by that owner is satisfied.
- Types of Lien: There are various types of liens, including possessory liens, which give the holder the right to keep possession of goods until payment is made.
- Possession: This is crucial—having possession of the goods means the lien holder can prevent the owner from reclaiming them until the obligation is fulfilled.
- Legal Right: A lien is enforceable by law, meaning that the lien holder can legally hold the property until the debt is settled.
Examples of Lien in Practice:
- Mechanic's Lien: If a mechanic repairs a vehicle but the owner does not pay, the mechanic may retain the vehicle until payment is made.
- Artisan's Lien: Similar to a mechanic's lien, an artisan who works on goods may retain those goods until the payment is received.
Conclusion:
Understanding liens is essential in legal and financial contexts as they provide creditors with a means to secure debts. The primary function of a lien is to allow the holder to retain possession of goods until the obligation is met, which is why option 'A' is the correct answer.
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Lien means _______a)to retain goods in his possessionb)rights to sell the goodsc)right to purchase the goodsd)right to destroy the goodsCorrect answer is option 'A'. Can you explain this answer?
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