What effect does a waiver of lien have on me hiring another company to complete the unfinished work?
Full Question:
Answer:
Florida law prohibits waiving the right to claim a lien in advance. It allows a lien right to be waived only to the extent of labor, services, or materials already provided. A waiver made before the labor, services, or materials have been provided is not enforceable.
You will need to read the terms of the lien waiver to determine the extent to which the lien is discharged. Typically, a form called a waiver and release of lien is used, which not only gives up the right to claim a lien, but discharges any lien filed. The waiver gives up lien rights, whereas the release strikes a lien from the records. In some cases a lien waiver is conditional and/or partial, and may still be effective, depending on the circumstances involved. I suggest calling the county recorder's office to verify the status of the lien.
Whether you can hire another contractor will depend on the contract terms and facts involved. If the previous contractor has significantly breached the contract, you may be relieved from performing under that contract. Contracts are agreements that are legally enforceable. A contract is an agreement between two parties that creates an obligation to do or refrain from doing a particular thing. The purpose of a contract is to establish the terms of the agreement by which the parties have fixed their rights and duties. An oral contract is an agreement made with spoken words and either no writing or only partially written. An oral contract may generally be enforced the same as a written agreement. However, it is much more difficult with an oral contract to prove its existence or the terms. Oral contracts also usually have a shorter time period within which a person seeking to enforce their contract right must sue. A written contract generally provides a longer time to sue than for breach of an oral contract. Contracts are mainly governed by state statutory and common (judge-made) law and private law. Private law generally refers to the terms of the agreement between the parties, as parties have freedom to override many state law requirements regarding formalities of contracts. Each state has developed its own common law of contracts, which consists of a body of jurisprudence developed over time by trial and appellate courts on a case-by-case basis.
An unjustifiable failure to perform all or some part of a contractual duty is a breach of contract. A legal action for breach of contract arises when at least one party's performance does not live up to the terms of the contract and causes the other party to suffer economic damage or other types of measurable injury. A lawsuit for breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach. Remedies for contractual breaches are not designed to punish the breaching party.
The five basic remedies for breach of contract include the following: money damages, restitution, rescission, reformation, and specific performance. A money damage award includes a sum of money that is given as compensation for financial losses caused by a breach of contract. Parties injured by a breach are entitled to the benefit of the bargain they entered, or the net gain that would have accrued but for the breach. The type of breach governs the extent of damages that may be recovered. Restitution is a remedy designed to restore the injured party to the position occupied prior to the formation of the contract. Parties seeking restitution may not request to be compensated for lost profits or other earnings caused by a breach. Instead, restitution aims at returning to the plaintiff any money or property given to the defendant under the contract. Plaintiffs typically seek restitution when contracts they have entered are voided by courts due to a defendant's incompetence or incapacity. Rescission is the name for the remedy that terminates the contractual duties of both parties, while reformation is the name for the remedy that allows courts to change the substance of a contract to correct inequities that were suffered. In order to have a rescission, both parties to the contract must be placed in the position they occupied before the contract was made. Courts have held that a party may rescind a contract for fraud, incapacity, duress, undue influence, material breach in performance of a promise, or mistake, among other grounds. Specific performance is an equitable remedy that compels one party to perform, as nearly as practicable, his or her duties specified by the contract. Specific performance is available only when money damages are inadequate to compensate the plaintiff for the breach
Promissory estoppel is a term used in contract law that applies where, although there may not otherwise be an enforceable contract, because one party has relied on the promise of the other, it would be unfair not to enforce the agreement. Promissory estoppel arises from a promise which the promisor should reasonably expect to induce action or forebearance of a definite and substantial character on the part of the promisee and which does induce such action or forebearance in binding if injustice can be avoided only by enforcement of the promise.
Detrimental reliance is a term commonly used to force another to perform their obligations under a contract, using the theory of promissory estoppel. Promissory estoppel may apply when a promise was made; reliance on the promise was reasonable or foreseeable; there was actual and reasonable reliance on the promise; the reliance was detrimental; and injustice can only be prevented by enforcing the promise. Detrimental reliance must be shown to involve reliance that is reasonable, which is a determination made on an individual case-by-case basis, taking all factors into consideration. Detrimental means that some type of harm is suffered. Reasonable reliance is usually referred to as a theory of recovery in contract law. It was what a prudent person might believe and act upon based on something told by another. Sometimes a person acts in reliance on the promise of a profit or other benefit, only to learn that the statements or promises were either incorrect or were exaggerated. The one who acted to their detriment in reasonable reliance may recover damages for the costs of his/her actions or demand performance. Reasonable reliance connotes the use of the standard of ordinary and average person.
The following are from Florida statutes:
713.20 Waiver or release of liens. —
(1) The acceptance by the lienor of an unsecured note for
all or any part of the amount of his or her demand shall not
constitute a waiver of his or her lien therefor unless
expressly so agreed in writing, nor shall it in any way
affect the period for filing the notice under s. 713.06(2),
or the claim of lien under s. 713.08.
(2) A right to claim a lien may not be waived in advance. A
lien right may be waived only to the extent of labor,
services, or materials furnished. Any waiver of a right to
claim a lien that is made in advance is unenforceable.
(3) Any person may at any time waive, release, or satisfy
any part of his or her lien under this part, either as to
the amount due for labor, services, or materials furnished
or for labor, services, or materials furnished through a
certain date subject to exceptions specified at the time of
release, or as to any part or parcel of the real property.
713.21 Discharge of lien. —
A lien properly perfected under this chapter may be
discharged by any of the following methods:
(1) By entering satisfaction of the lien upon the margin of
the record thereof in the clerk's office when not otherwise
prohibited by law. This satisfaction shall be signed by the
lienor, the lienor's agent or attorney and attested by said
clerk. Any person who executes a claim of lien shall have
authority to execute a satisfaction in the absence of actual
notice of lack of authority to any person relying on the
same.
(2) By the satisfaction of the lienor, duly acknowledged and
recorded in the clerk's office. Any person who executes a
claim of lien shall have authority to execute a satisfaction
in the absence of actual notice of lack of authority to any
person relying on the same.
(3) By failure to begin an action to enforce the lien within
the time prescribed in this part.
(4) By an order of the circuit court of the county where the
property is located, as provided in this subsection. Upon
filing a complaint therefor by any interested party the
clerk shall issue a summons to the lienor to show cause
within 20 days why his or her lien should not be enforced by
action or vacated and canceled of record. Upon failure of
the lienor to show cause why his or her lien should not be
enforced or the lienor's failure to commence such action
before the return date of the summons the court shall
forthwith order cancellation of the lien.
(5) By recording in the clerk's office the original or a
certified copy of a judgment or decree of a court of
competent jurisdiction showing a final determination of the
action.
