Hypothecation, letter of

Updated: Aug 20, 2021

Exporters may borrow from a bank, using the goods they are shipping as security. Until repaid, the banker has a lien on the goods, as they are listed in the bill of lading. The lien. which of course is not a possessory lien. is conveyed by a ‘letter of hypothecation’.

Reference: The Penguin Business Dictionary, 3rd edt.

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