Home>Levelset Community>Legal Help>I put a lien on a project today. The general contractor called threatening to sue me for breach of contract because I have a line in my contract saying I can't put a lien on the property. Is that legal?
I put a lien on a project today. The general contractor called threatening to sue me for breach of contract because I have a line in my contract saying I can't put a lien on the property. Is that legal?
Louisiana is a state with no specific statutory provision related to "no lien" clauses or the advance waiver of lien rights prior to work. However, there have been cases that hold a pre-work lien waiver or n-lien clause contained within a contract is unenforceable.
The 5th Circuit decided a case on this point and noted that: a “waiver” in Louisiana occurs only when there is “an existing right, a knowledge of its existence and an actual intention to relinquish it or conduct so inconsistent with the intent to enforce the right as to induce a reasonable belief that it has been relinquished.” Steptore v. Masco Constr. Co., Inc., 643 So.2d 1213, 1216 (La. 1994). Since there is no existing right to claim a lien prior to work being performed, the associated right could not be waived prior to the right existing.
Further, the court reasoned that since the party claiming the lien was entitled to payment under the contract, the failure to pay is a failure to perform on an obligation of the contract, that gives the lien claimant the right to dissolve the contract entirely. This dissolution of the contract would also dissolve the "no lien" clause contained therein.
There can be some danger, especially since this case was in the 5th Circuit applying Louisiana law, not in Louisiana courts, and parties can generally initiate a lawsuit for any or no reason (whether it's appropriate is a different story), but it appears that the scales generally tip in favor of the lien claimant and against the contractual no-lien clause.