ACH Payment - Lien Waiver
CaliforniaWe are using Digital ACH Payment. The software requires a Subcontractor to sign an Unconditional Lien Waiver, next an ACH payment is made to the Subcontractor's bank account. Once the Subcontractor receives their funds, the lien wavier is released to the Contractor. However the lien waiver states "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." Has California addressed this issue?
2 replies
Technically, the payment platform should not require execution of an unconditional waiver before payment has made. But presumably, the payment platform is holding the document in trust pending actual payment, when it releases the document to the contractor. As long as the terms of the payment platform prevent it from releasing or otherwise using the executed unconditional waiver before payment has been made, this process is likely acceptable. But in executing the waiver before actual payment you are putting a great deal of trust on the payment platform and I would not recommend doing so without clearly understanding its terms of service.
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