What is an Unconditional Waiver?
An unconditional waiver is basically a waiver of all present and future legal rights. Such a waiver is most often utilized in the construction context by homeowners or professional construction companies wanting to protect themselves from mechanics' liens. Unconditional waivers are also frequently used in the group sports and leisure activities arena, where a person seeks to protect himself from liability by having another party unconditionally give up or waive certain rights to bring suit.
Unconditional lien waivers are commonly utilized during commercial and residential construction projects to protect the property from claims brought by contractors, suppliers and others who work on the project. They are essentially waivers against any future claims alleging non-payment for services or supplies rendered. There are two main types of unconditional waivers — an unconditional waiver and release of final payment, and an unconditional waiver on progress payments.
Progress payments are the payments contractors and suppliers receive based on the stages they’ve completed on the construction project. The execution of an unconditional waiver on a progress payment means the payment issued is what the contractor or supplier is owed at that point. The waiver acknowledges there are still funds owed to the supplier or contractor.
Upon the completion of the project, an unconditional waiver and release of final payment is executed. This in effect releases the construction project from any further financial obligations to suppliers or contractors. The contractor attests by signing the waiver that full payment was received and that no further claims for payment can be brought.
Both types of waivers must include certain information to be deemed valid. This includes the names of the parties involved, a description of the job, the amount of the entire contract, the amount paid to the contractor, and the payment conditions and additional terms outlining exactly what types of claims are being released. The unconditional waiver on progress payment will also contain language indicating the amount still due under the contract.
Failure to pay contractors and suppliers for work on construction projects can result in the constructed property being encumbered by mechanics' liens. These liens can operate as a legal impediment to the transfer of title and will usually have to be paid before the title to the property can transfer to another owner. Unconditional waivers offer legal protection against these occurrences.
In the nonconstruction context, unconditional waivers are most often seen in the professional and recreational group sports context and are directly related to avoiding liability in the event that a participant is injured. Whenever an activity is undertaken that carries with it inherent risk, the execution of an unconditional waiver of rights will more than likely be required.
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