Neiderhauser Builders & Development Corp. v. Campbell
824 P.2d 1193 | Court of Appeals of Utah | 1992
What This Case Means for Subcontractors
A builder sued homeowners over unpaid extras on a construction project. The homeowners had signed lien waivers on the back of construction loan checks. The court ruled that clear, unambiguous lien waivers are binding and prevent contractors from filing liens—but only if there's no fraud or special agreement. The court sent the case back because there were unresolved questions about whether the builder made a mistake, deserved extra payment outside the contract, or had bonding issues that might override the waiver.
Key Takeaways
- •Lien waivers printed on checks are legally binding if they're clear and unambiguous—endorsing the check means you waive your lien rights for that payment
- •Don't sign lien waivers for work you haven't been fully paid for or for extras not yet settled; the waiver will block your lien claim later
- •If you believe there's fraud, a separate written agreement, or a mistake in what the waiver covers, document it in writing immediately—don't rely on verbal objections
Unambiguous waiver of lien rights is binding absent fraud or agreement.
Frequently Asked Question
If I cash a construction check with a lien waiver printed on the back, does that waive my right to file a lien?
Yes, if the waiver language is clear and unambiguous. By endorsing or depositing the check, you're agreeing to waive your lien rights for that payment. The only exceptions are if there's fraud involved or you have a separate written agreement that contradicts the waiver. Always review check language before cashing and negotiate payment terms in writing first.
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