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Clients want us to sign unconditional waivers, progress, not final but there are multiple invoices listed as exceptions

California

I am a supplier and now have a customer who has started creating there own waivers and demanding we sign them. They have provided unconditional waivers thru a specific date that include multiple invoices. Then they have provided continual waivers , thru the same date showing those invoices as owed. How there be any integrity left in the process if we are giving out both types of waivers with the same date? Either we as the supplier have been paid thru a specific date or we have not, can’t be both, right?

2 replies

Jun 10, 2022

A few things to note here. First and foremost, California statutes regulate the form and content of lien waivers. If the customer is "creating their own waivers," too much deviation from the statutory requirements could render them unenforceable.

That being said, doubling down on both unconditional and conditional waivers (which I assume you meant by "continual") is an unnecessary practice; and in this case in logically reverse order. There are some in the industry that request conditionals, and once payment is made will request an unconditional for the same payments; but again, unnecessary.

Ultimately, one should always be hesitant when executing unconditional waivers unless it is directly exchanged for payment. But, in the current situation, if an unconditional waiver is executed for let's say invoices 1, 2, and 3, a subsequent conditional waiver covering the same invoices and indicating the same through date would essentially have zero effect; since lien rights for those payments through that date have already effectively been waived. This process seems a bit convoluted and may be worth reviewing any contract terms governing the payment and waiver process, or discussing the matter in more detail with your customer.

Here are some additional resources that may prove useful:

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Jun 10, 2022

One final thing to add.

If i's unavoidable, then signing an unconditional waiver with a clear and explicit Exceptions section for all unpaid amaounts might be the best option. Listing out any and all unpaid invoices and unpaid amounts in that section of the unconditional waiver could help by (1) preserving lien rights on those unpaid amounts, and (2) displaying the ridiculousness of requiring an unconditional waiver if/when a substantial amount of invoices remain unpaid.

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