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what is a conditional waiver?

I have a customer requesting a conditional waiver. Below is what they requested specifically. "Per the contract, there is 5% retention for this purchase order. I can revise the invoice to reflect the retention, but we will also need a conditional waiver in the amount of $39,355.18. Can you ask the vendor to please send one?"

1 reply

Mar 10, 2020

A conditional waiver is a lien waiver that is only effective when a certain specific condition (receipt of payment) is met. You can read all you want to know (and more) about lien waivers here, but simply a lien waiver acts as a receipt for payment or the promise of payment, and works to waive the right to file a lien for the amount reflected in the waiver (or for work through the date specified in the waiver). With respect to a conditional waiver pursuant to a progress payment, the waiver is not binding until the payment is received, and is given when further payments and work are expected on the project. California has specific waiver templates that must be used in order for a lien waiver to be valid. These waivers are set forth by statute. You can create and exchange a waiver for free, quickly and easily here.

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