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Contract termination by lien waiver

Anonymous Contractor

We signed a contract for a project - they are willing to let us out of it - we did not place any materials on the job or labor. we are owed no money- they said they would provide a lien to terminate the contract. How do I make sure there is no recoil for then to come back and try to sue us for the difference of the contract.

1 reply

Matt Viator

Construction Lawyer

Levelset Admin at Levelset

| 997 reviews

Feb 17, 2020

Generally, on a job where a supplier has furnished no material, that supplier won't have any lien rights - even if there was a contract signed. But, it's still common for a customer to want to collect a lien waiver to ensure that no surprises pop up. And, for a claimant without any lien rights, it shouldn't be too scary to provide a lien waiver. It's natural, though, for a supplier to want to look out for potential future legal disputes - like if a customer might try and pursue funds from their terminated supplier due to increased material costs. So, in exchange for a lien waiver, it might be wise for a supplier to ask their customer to provide a waiver of potential future legal claims against the supplier for the job. And, if both parties are truly prepared to walk away from their original agreement, that shouldn't be a terribly huge ask.

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