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Legal Memorandum: Waiver of Mechanics' Liens

Issue: Under Minnesota and California law, who may bind a company through a waiver of mechanics’ liens or payment bond claims?

Area of Law: Litigation & Procedure
Keywords: Waiver of a mechanics' lien; Payment bond claim
Jurisdiction: California, Minnesota
Cited Cases: None
Cited Statutes: Cal. Civ. Code § 3262(a); Minn. Stat. § 514.011, § 574.31, subd. 2
Date: 02/01/2006

A search of California and Minnesota case law did not uncover any cases in which the authority of the person executing a waiver of a mechanics’ lien or payment bond claim was brought into dispute.  It therefore appears that general principles of agency dictate a person’s authority to bind a contractor in such a manner.

Under Cal. Civ. Code § 3262(a), a waiver may be “signed by the claimant or his or her authorized agent.”  The statute does not, however, establish what authorization is required to confer agency.  A review of California lien and payment bond claim waiver cases uncovered no case questioning the authority of a person to execute a § 3262 waiver.  While many cases construe waivers and acknowledge them to be signed by an “authorized agent,” none suggest that anything other than ordinary principles of agency law should be applied.

Likewise, in Minnesota, general agency principles appear to govern lien and payment bond claim waivers.  No Minnesota case has been located that questions the authority of one executing such a waiver.  Chapter 514 of the Minnesota statutes contains many references to agency, such as the notice provisions relating to any contractor-subcontractor agreement in Minn. Stat. § 514.011, but nothing suggests that general agency principles do not apply in matters relating to mechanics’ liens.

Minn. Stat. § 574.31, subd. 2 provides that "[i]f an agent or attorney-in-fact is authorized to accept service of notice of the claim for the contractor or surety, that fact must be expressly  [...]

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