Is the lien waiver our Kansas subcontract makes us sign enforceable?
Only as far as you have been paid. In a contract for private construction, a provision that purports to waive, release or extinguish rights provided by article 11 of chapter 60 of the Kansas Statutes Annotated, the mechanic's lien article, is against public policy and is void and unenforceable, "except that a contract may require a contractor or subcontractor to provide a waiver or release of such rights as a condition for payment, but only to the extent of the amount of payment received" (K.S.A. 16-1803(b)(2)). The same subsection voids a provision purporting to waive, release or extinguish the right to resolve disputes through litigation in court or substantive or procedural rights in connection with that litigation, except that a contract may require binding arbitration as a substitute for litigation or non-binding alternative dispute resolution as a prerequisite to it. The words that trigger the act are defined: "construction" is furnishing labor, equipment, material or supplies used or consumed for the design, construction, alteration, renovation, repair or maintenance of a building, structure, road, bridge, water line, sewer line, oil line, gas line, appurtenance or other improvement to real property, including any moving, demolition or excavation, and a "contract" is one concerning construction between an owner and a contractor, a contractor and a subcontractor or a subcontractor and another subcontractor (K.S.A. 16-1802(b)-(c)). None of this can be contracted around: the rights and duties prescribed by the act are not waivable or varied under the terms of a contract, and the terms of any contract waiving them are unenforceable (K.S.A. 16-1801(b)).
The trap
The statute converts an up-front lien waiver into a receipt. A waiver demanded as a condition for payment is permitted, but only to the extent of the amount actually received, so a form that releases lien rights for work not yet paid for is outside the exception the statute allows. Watch the act's scope as well: it does not apply to single family residential housing or to multifamily residential housing of four units or less, does not apply to public works projects, and does not apply to contracts entered into before the act's effective date (K.S.A. 16-1807). Outside those boundaries this section gives a subcontractor nothing. Related and often missed: a pay-if-paid provision making payment to a subcontractor contingent on receipt of payment from another private party "is no defense to a claim to enforce a mechanic's lien or bond" under article 11 of chapter 60 (K.S.A. 16-1803(c)).
7 authorities
- statuteK.S.A. 16-1803enactment date not established
The words that state the rule
(2) a provision that purports to waive, release or extinguish rights provided by article 11 of chapter 60 of the Kansas Statutes Annotated, and amendments thereto, except that a contract may require a contractor or subcontractor to provide a waiver or release of such rights as a condition for payment, but only to the extent of the amount of payment received; and
- statuteK.S.A. 16-1803enactment date not established
The words that state the rule
(c) Any provision in a contract for private construction providing that a payment from a contractor or subcontractor to a subcontractor is contingent or conditioned upon receipt of a payment from any other private party, including a private owner, is no defense to a claim to enforce a mechanic's lien or bond to secure payment of claims pursuant to the provisions of article 11 of chapter 60 of the Kansas Statutes Annotated, and amendments thereto.
- statuteK.S.A. 16-1801enactment date not established
The words that state the rule
The rights and duties prescribed by this act shall not be waivable or varied under the terms of a contract. The terms of any contract waiving the rights and duties prescribed by this act shall be unenforceable.
- statuteK.S.A. 16-1807enactment date not established
The words that state the rule
The provisions of this act shall not apply to single family residential housing and multifamily residential housing of four units or less. The provisions of this act shall not apply to public works projects. The provisions of this act shall not apply to contracts entered into prior to the effective date of this act.
- statuteK.S.A. 16-1803enactment date not established
The words that state the rule
The following provisions in a contract for private construction shall be against public policy and shall be void and unenforceable: (1) A provision that purports to waive, release or extinguish the right to resolve disputes through litigation in court or substantive or procedural rights in connection with such litigation except that a contract may require binding arbitration as a substitute for litigation or require non-binding alternative dispute resolution as a prerequisite to litigation;
- statuteK.S.A. 16-1803enactment date not established
The words that state the rule
(3) a provision that purports to waive, release or extinguish rights of subrogation for losses or claims covered or paid by liability or workers compensation insurance except that a contract may require waiver of subrogation for losses or claims paid by a consolidated or wrap-up insurance program, owners and contractors protective liability insurance, or project management protective liability insurance, unless otherwise prohibited under subsection (b)(5) of K.S.A. 40-5403, and amendments thereto.
- statuteK.S.A. 16-1802enactment date not established
The words that state the rule
(b) "Construction" means furnishing labor, equipment, material or supplies used or consumed for the design, construction, alteration, renovation, repair or maintenance of a building, structure, road, bridge, water line, sewer line, oil line, gas line, appurtenance or other improvement to real property, including any moving, demolition or excavation. (c) "Contract" means a contract or agreement concerning construction made and entered into by and between an owner and a contractor, a contractor and a subcontractor or a subcontractor and another subcontractor.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.