Statutory lien on the cargo

In this article, we explain what it means for transport companies and their clients – in a concise and practice-oriented way.

§ 440 HGB applies whenever the freight contract is governed by the law of the Federal Republic of Germany. This also applies to cross-border transport orders subject to the CMR Convention, provided that German law applies to the contract in other respects and the enforcement of the lien does not conflict with the CMR Convention.

What is regulated by § 440 of the German Commercial Code?

The German Commercial Code gives carriers a statutory lien on the goods in transit as security for outstanding claims under the contract of freight carriage. This means that as long as the goods are in the custody of the carrier, he can withhold them as long as the client remains in default of payment.

1. Lien for claims arising from the specific contract of freight carriage

§ 440 of the German Commercial Code gives the carrier a statutory lien on the goods handed over to him to secure claims arising from the contract of carriage on which the transport carried out is based. This applies to all claims established by the contract of freight.

If the sender is not the owner of the cargo, the consent of the third party for the carriage of the goods must be provided.

2. Lien for claims arising from the business relationship between the carrier and the ordering party

The following conditions must be met for the lien to also secure claims from other freight contracts with the same sender:

• Claims must be uncontested (at least until the assertion)
• The cargo must be owned by the debtor

This extended lien serves to secure an ongoing business relationship.

Legal basis of the right of lien:

The right of lien comes into force by law as soon as:

• the contract of freight is subject to German law,
• there is a valid contract of freight,
• the goods are in the possession of the carrier,
• there is a claim to be secured from a transport contract,
• there is no contractual exclusion or precedence of a third-party right.

The right of lien exists only as long as the goods are in the custody of the carrier. If the goods are delivered, the right of lien expires.

What exactly does the right of lien cover?

The right of lien covers all items that are the subject of the carriage, including the packaging and accompanying documents, provided that these have come into the possession of the carrier. It must be possible to enforce the lien by selling the goods.

What is the carrier allowed to do in an actual case of lien?

If payment is delayed, the carrier may:

• refuse to return the goods (right of retention),
• withhold the goods as security,
• realise the goods if necessary – e.g. by public auction in accordance with §§ 1233 ff. oft he German Commercial Code.

Important: As a rule, a threat of execution and the setting of a reasonable deadline are required before realisation.

Risks for clients and third parties

The following risks arise for clients, as well as for recipients and owners of goods:

• If the lien is effectively exercised, it can lead to delayed delivery or even loss of goods.
• Even third-party retention of title does not automatically protect against realisation if the carrier was acting in good faith.

Recommendations for companies

For carriers:

• Use liens selectively – but only for clearly verifiable claims,
• Document any threat of seizure and setting of a deadline,
• Have sample contracts regularly checked by a lawyer.

For clients and consignees:

• Observe payment deadlines to avoid liens,
• Check or regulate clauses on liens in contracts.

Conclusion: Be aware of liens – avoid conflicts

The legal lien according to § 440 of the German Commercial Code is an effective, legally established means of applying pressure to secure justified claims. Anyone who trades in freight as a business – whether as a consignor, carrier or consignee – should be fully aware of the requirements and limitations in order to protect their rights and avoid risks.