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Alabama Waivers

Alabama Waivers


  • A provision in a contract between the owner and the general contractor waiving liens is not binding on the laborers and materialmen of the general contractor unless they have actual notice thereof when they furnish labor or material. Baker Sand & Gravel Co. v. Rogers Plumbing & Heating Co., 154 So. 591 (1934).
  • Lien Waivers: Lien rights may be waived in a contract, and partial waivers may waive security for unfinished work, retainage, extras and claims.
  • “Paid if Paid” is eforced if explicit.
  • “Pay when Paid” suggests time for payment.
  • Pay-when-paid clause in the subcontract did not create a condition precedent to payment.

Retainage Provisions

Public

  • Alabama Code - Section 39-2-12: PARTIAL AND FINAL PAYMENTS OF CONTRACTORS BY AWARDING AUTHORITIES GENERALLY.  Retainage may not exceed 5 percent. In making the partial payments, there shall be retained not more than five percent of the estimated amount of work done and the value of materials stored on the site or suitably stored and insured off-site, and after 50 percent completion has been accomplished, no further retainage shall be withheld. Upon completion and acceptance of each division of the contract, full payment of the amount retained is to be made, unless such division is an integral component of the project. A contractor may elect to substitute securities in lieu of retainage. Source: http://alisondb.legislature.state.al.us/alison/codeofalabama/1975/coatoc.htm

 

Private

  • Alabama Code - Section 8-29-3: TIMELY PAYMENTS TO CONTRACTORS AND SUBCONTRACTORS; NONCOMPLIANCE WITH CHAPTER; PERCENTAGE OF RETAINAGE ON PAYMENTS.  The percentage of retainage withheld between a contractor and subcontractor may not exceed the retainage withheld by the owner. Any percent of retainage on payments made by a contractor to the subcontractor that exceed the percentage of retainage on payments made by the owner to the contractor shall be subject to interest, to be paid by the contractor to the subcontractor at the rate of 1 percent per month. 
    Source: http://alisondb.legislature.state.al.us/alison/codeofalabama/1975/coatoc.htm