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Q.What does a waiver and release upon final payment need to say to be valid?
A.The waiver and release must be signed by the contractor (subcontractor and/or supplier) and be in substantially the same form as provided by Civil Code Section 3262. There are two types of waivers and Release for a final payment .
Conditional Waiver and Release Upon Final Payment.
A Conditional Waiver and Release Upon Final Payment should be used when the contractor is required by a contract to execute a waiver and release in order to induce the owner to make the final payment. In other words it is typically executed before the contractor (subcontractor and/or supplier) has been paid. The waiver is "conditional" because it does not become effective until the contractor (subcontractor and/or supplier) actually receives the final payment. Receipt of actual payment can be evidenced by an endorsement on a check which shows the check was paid and money withdrawn from a bank account or a written acknowledgment of payment given by the contractor, subcontractor and/or supplier. A sample "Conditional Waiver and Release Upon Final Payment" can be viewed here.
Unconditional Waiver and Release Upon Final Payment.
An Unconditional Waiver and Release Upon Final Payment should be used when the contractor (subcontractor and/or supplier) is required by a contract to execute a waiver and release upon receipt of the final payment. The difference is that with the unconditional waiver and release the contractor (subcontractor and/or supplier) is admitting receipt of the final payment. It is typically executed just before the contractor (subcontractor and/or supplier) will be handed the check. The waiver is "unconditional" and therefore immediately valid. A sample "Unconditional Waiver and Release Upon Final Payment" can be viewed here.
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