Is this contractual lien waiver in the subcontract worth anything?
No. An owner, direct contractor or subcontractor may not, by contract or otherwise, waive, affect or impair any other claimant's rights under the works-of-improvement part, with or without notice, and any contract term purporting to do so is VOID and unenforceable unless and until the claimant executes and delivers a waiver and release under the statutory article (Civ. Code § 8122). A claimant's waiver and release does not release the owner, construction lender or payment-bond surety unless it is in substantially the form provided in the article and signed by the claimant, and, for a conditional release, there is evidence of payment (§ 8124). Where a claimant is required to sign a waiver in exchange for a progress payment and is not in fact paid, the waiver is null, void and unenforceable unless it is in substantially the statutory form (§ 8132). The statutory forms also fix what a waiver reaches. A progress waiver, conditional or unconditional, releases rights only for labor, service, equipment and material provided "through the Through Date" and under change orders fully executed before signing, and by its own Exceptions "does not affect" retentions, extras for which the claimant has not been paid, or contract rights including rescission, abandonment, breach and "the right to recover compensation for work not compensated by the payment" (the conditional form also excepts earlier progress payments for which a conditional waiver was given and not paid) (§§ 8132, 8134). A final waiver releases the rights for the whole job and excepts only "Disputed claims for extras in the amount of" a stated sum (§§ 8136, 8138). And an unconditional waiver is null, void and unenforceable unless it is in substantially the statutory form and its "Notice to Claimant" (that the document is enforceable "EVEN IF YOU HAVE NOT BEEN PAID") is printed in at least as large a type as the largest type otherwise in the form (§§ 8134, 8138).
The trap
The 'waiver of lien rights' clause in the subcontract does nothing by itself: under § 8126, an oral or written statement purporting to waive, release, impair or otherwise adversely affect a lien or claim is void, and creates no estoppel, unless it is pursuant to a waiver and release under the statutory article (one form for each of four situations (conditional/unconditional x progress/final), signed by the claimant), or the claimant has actually received payment in full for the claim. Section 8130 separately preserves an accord and satisfaction concerning a good faith dispute, and an agreement settling a pending court action, where they make specific reference to the lien or claim. One release in the article escapes the forms entirely: under § 8128 a claimant may reduce the amount of, or release in its entirety, a stop payment notice, and that reduction or release need only be in writing and "may be given in a form other than a waiver and release form provided in this article", so a non-form writing that releases a stop payment notice does release it, to the extent of the reduction, while leaving every other right of the claimant alone. The second trap is the check: a conditional release is not effective without evidence of payment, which means a claimant's endorsement on a paid joint-payee check or a written acknowledgment of payment, so a signed conditional release sitting in the file with an unpaid check releases nothing. The third trap is reading the signed form for more than it says: a progress waiver in the statutory form never releases retention, unpaid extras or the claimant's contract claims for uncompensated work, because the form's printed Exceptions keep them out, so an owner holding a stack of executed progress waivers still faces the retention claim and the breach claim, and only the FINAL forms close the job.
10 authorities
- statuteCal. Civ. Code § 8122enactment date not established
The words that state the rule
An owner, direct contractor, or subcontractor may not, by contract or otherwise, waive, affect, or impair any other claimant’s rights under this part, whether with or without notice, and any term of a contract that purports to do so is void and unenforceable unless and until the claimant executes and delivers a waiver and release under this article.
- statuteCal. Civ. Code § 8124enactment date not established
The words that state the rule
A claimant’s waiver and release does not release the owner, construction lender, or surety on a payment bond from a lien or claim unless both of the following conditions are satisfied: (a) The waiver and release is in substantially the form provided in this article and is signed by the claimant. (b) If the release is a conditional release, there is evidence of payment to the claimant. Evidence of payment may be either of the following: (1) The claimant’s endorsement on a single or joint payee check that has been paid by the financial institution on which it was drawn. (2) Written acknowledgment of payment by the claimant.
- statuteCal. Civ. Code § 8132enactment date not established
The words that state the rule
If a claimant is required to execute a waiver and release in exchange for, or in order to induce payment of, a progress payment and the claimant is not, in fact, paid in exchange for the waiver and release or a single payee check or joint payee check is given in exchange for the waiver and release, the waiver and release shall be null, void, and unenforceable unless it is in substantially the following form: CONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT NOTICE: THIS DOCUMENT WAIVES THE CLAIMANT’S LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS EFFECTIVE ON RECEIPT OF PAYMENT. A PERSON SHOULD NOT RELY ON THIS DOCUMENT UNLESS SATISFIED THAT THE CLAIMANT HAS RECEIVED PAYMENT. Identifying Information Name of Claimant: Name of Customer: Job Location: Owner: Through Date: Conditional Waiver and Release This document waives and releases lien, stop payment notice, and payment bond rights the claimant has for labor and service provided, and equipment and material delivered, to the customer on this job through the Through Date of this document. Rights based upon labor or service provided, or equipment or material delivered, pursuant to a written change order that has been fully executed by the parties prior to the date that this document is signed by the claimant, are waived and released by this document, unless listed as an Exception below. This document is effective only on the claimant’s receipt of payment from the financial institution on which the following check is drawn: Maker of Check: Amount of Check: $ Check Payable to: Exceptions This document does not affect any of the following: (1) Retentions. (2) Extras for which the claimant has not received payment. (3) The following progress payments for which the claimant has previously given a conditional waiver and release but has not received payment: Date(s) of waiver and release: Amount(s) of unpaid progress payment(s): $ (4) Contract rights, including (A) a right based on rescission, abandonment, or breach of contract, and (B) the right to recover compensation for work not compensated by the payment. Signature Claimant’s Signature: Claimant’s Title: Date of Signature:
- statuteCal. Civ. Code § 8126enactment date not established
The words that state the rule
An oral or written statement purporting to waive, release, impair or otherwise adversely affect a lien or claim is void and unenforceable and does not create an estoppel or impairment of the lien or claim unless either of the following conditions is satisfied: (a) The statement is pursuant to a waiver and release under this article. (b) The claimant has actually received payment in full for the claim.
- statuteCal. Civ. Code § 8130enactment date not established
The words that state the rule
This article does not affect the enforceability of either an accord and satisfaction concerning a good faith dispute or an agreement made in settlement of an action pending in court if the accord and satisfaction or agreement and settlement make specific reference to the lien or claim.
- statuteCal. Civ. Code § 8134enactment date not established
The words that state the rule
If the claimant is required to execute a waiver and release in exchange for, or in order to induce payment of, a progress payment and the claimant asserts in the waiver that the claimant has, in fact, been paid the progress payment, the waiver and release shall be null, void, and unenforceable unless it is in substantially the following form, with the text of the “Notice to Claimant” in at least as large a type as the largest type otherwise in the form: UNCONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT NOTICE TO CLAIMANT: THIS DOCUMENT WAIVES AND RELEASES LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL WAIVER AND RELEASE FORM. Identifying Information Name of Claimant: Name of Customer: Job Location: Owner: Through Date: Unconditional Waiver and Release This document waives and releases lien, stop payment notice, and payment bond rights the claimant has for labor and service provided, and equipment and material delivered, to the customer on this job through the Through Date of this document. Rights based upon labor or service provided, or equipment or material delivered, pursuant to a written change order that has been fully executed by the parties prior to the date that this document is signed by the claimant, are waived and released by this document, unless listed as an Exception below. The claimant has received the following progress payment: $ Exceptions This document does not affect any of the following: (1) Retentions. (2) Extras for which the claimant has not received payment. (3) Contract rights, including (A) a right based on rescission, abandonment, or breach of contract, and (B) the right to recover compensation for work not compensated by the payment. Signature Claimant’s Signature: Claimant’s Title: Date of Signature:
- statuteCal. Civ. Code § 8136enactment date not established
The words that state the rule
If the claimant is required to execute a waiver and release in exchange for, or in order to induce payment of, a final payment and the claimant is not, in fact, paid in exchange for the waiver and release or a single payee check or joint payee check is given in exchange for the waiver and release, the waiver and release shall be null, void, and unenforceable unless it is in substantially the following form: CONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT NOTICE: THIS DOCUMENT WAIVES THE CLAIMANT’S LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS EFFECTIVE ON RECEIPT OF PAYMENT. A PERSON SHOULD NOT RELY ON THIS DOCUMENT UNLESS SATISFIED THAT THE CLAIMANT HAS RECEIVED PAYMENT. Identifying Information Name of Claimant: Name of Customer: Job Location: Owner: Conditional Waiver and Release This document waives and releases lien, stop payment notice, and payment bond rights the claimant has for labor and service provided, and equipment and material delivered, to the customer on this job. Rights based upon labor or service provided, or equipment or material delivered, pursuant to a written change order that has been fully executed by the parties prior to the date that this document is signed by the claimant, are waived and released by this document, unless listed as an Exception below. This document is effective only on the claimant’s receipt of payment from the financial institution on which the following check is drawn: Maker of Check: Amount of Check: $ Check Payable to: Exceptions This document does not affect any of the following: Disputed claims for extras in the amount of: $ Signature Claimant’s Signature: Claimant’s Title: Date of Signature:
- statuteCal. Civ. Code § 8138enactment date not established
The words that state the rule
If the claimant is required to execute a waiver and release in exchange for, or in order to induce payment of, a final payment and the claimant asserts in the waiver that the claimant has, in fact, been paid the final payment, the waiver and release shall be null, void, and unenforceable unless it is in substantially the following form, with the text of the “Notice to Claimant” in at least as large a type as the largest type otherwise in the form: UNCONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT NOTICE TO CLAIMANT: THIS DOCUMENT WAIVES AND RELEASES LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL WAIVER AND RELEASE FORM. Identifying Information Name of Claimant: Name of Customer: Job Location: Owner: Unconditional Waiver and Release This document waives and releases lien, stop payment notice, and payment bond rights the claimant has for all labor and service provided, and equipment and material delivered, to the customer on this job. Rights based upon labor or service provided, or equipment or material delivered, pursuant to a written change order that has been fully executed by the parties prior to the date that this document is signed by the claimant, are waived and released by this document, unless listed as an Exception below. The claimant has been paid in full. Exceptions This document does not affect the following: Disputed claims for extras in the amount of: $ Signature Claimant’s Signature: Claimant’s Title: Date of Signature:
- statuteCal. Civ. Code § 8120enactment date not established
The words that state the rule
The provisions of this chapter apply to a work of improvement governed by this part.
- statuteCal. Civ. Code § 8128enactment date not established
The words that state the rule
(a) A claimant may reduce the amount of, or release in its entirety, a stop payment notice. The reduction or release shall be in writing and may be given in a form other than a waiver and release form provided in this article.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.