Home>Levelset Community>Legal Help>If a construction contract calls for mediation prior to any legal remedies, what are the ramifications for the builder if he goes ahead and files a lien
If a construction contract calls for mediation prior to any legal remedies, what are the ramifications for the builder if he goes ahead and files a lien
Builder was extravagant in building with no visible work done
1 reply
Oct 31, 2018
This is a great question. While, generally in the U.S. parties enjoy "freedom of contract" (that is they are allowed to contract for what they want to contract for) there are limitations to that ability. For example, parties may not contract for something illegal, or contract for something against public policy.
Many states disallow "no lien clauses" because the ability to file a mechanics lien to secure payment for labor or materials furnished to a construction project is fundamental public policy. Additionally, many states do not allow parties to provide a waiver of lien rights in advance of work or payments. Idaho has no specific statutory provision disallowing advance lien waiver, but Idaho court decisions have routinely declared advance lien waivers to be unenforceable unless the waiver is supported by some consideration.
In most cases, determining whether a party may be forced to arbitrate prior to filing a mechanics lien would be examined similarly to a no-lien clause, to determine whether the clause at issue deprived the potential claimant of a statutory right. In many situations, these types of clauses do not end up prohibiting the filing of a mechanics lien, although it is sometimes impossible to determine what a court may decide in any specific circumstance.