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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
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Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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release of lein for final payment exclude from arbitration?

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Does a release of lein for final payment exclude me from disputing the remainder of a contract through arbitration?


I have a dispute with a contractor because my contract was terminated for unjustifiable cause. They want to pay me the final amount due but want me to sign a final payment lien release. i just want to know that if I sign this will it exclude me from filing the arbitration case? I am in Maryland, as well as the project and the GC.

Thank you for your question. I look forward to working with you to provide you the information you are seeking.

What does the actual wording of the lien release they are giving you state as it depends on the wording of what you are signing?
Customer: replied 3 years ago.

This is the 'meat' of the form. Wording prior, and after is identification of the parties and signing etc...




Subcontractor/Materialman, its successors and assigns, in consideration of the below payment and other valuable consideration, receipt of which is hereby acknowledged, has released and by these presents does release and forever discharge the Development, Mulberry Estates, LLLP (the “Owner”), Maryland Department of Housing and Community Development (“First Lender”), United States of America acting through USDA Rural Housing Service (“Second Lender”), Community Development Administration (“Third Lender”), and General Contractor, their respective successors and assigns, of and from all actions, causes of actions, debts, accounts, agreements, judgments, claims and damages which it now has, or may hereafter have, by reason
of work performed and/or materials supplied and/or equipment furnished under agreement with the General Contractor.

Subcontractor/Materialman hereby acknowledges receipt of payment herein in the amount of $7,346.38 which completes payment in full for all work, material and services supplied at the





Thank you for your response and the information.

If you sign this you are agreeing you have no more claim to the money and are agreeing you have been paid in full. Once you sign this you would not have any further claims. Thus, if you have a claim for money, you should not release him from the lien you would be able to put on the job.

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Customer: replied 3 years ago.

So i would not be able to file for arbitration for the remainder of the contract? I was halfway through the project and they terminated my contract for no cause. The remainder was handed over to another contracter and I am being beat out of nearly $60K. The $7K is the amount they were supposed to pay me up to date, because we had reached 'substantial completion'.

Thank you for your response.

That is correct. If you sign this waiver, then you are going to be giving up your rights to sue for more. If you want to arbitrate the wrongful termination of your contract, do not sign the waiver and file your request for arbitration.
Customer: replied 3 years ago.

I'm just wonder about the work performed, material supplied, and equipment furnished. they seem to be as of the date but not excluding the remainder.

Thank you for your response.

In deciding whether or not to pursue the termination of the contract through arbitration you have to decide what you want out of this. If you want the money you are due up to date on the contract and do not want to pursue them for the breach of the remainder of the contract and they are willing to pay you for everything up to date, then signing the lien release and getting your money would be fine, but that would mean you could not sue for breach of the remainder of the contract and seek arbitration on the remainder.

This all depends on what you want out of this. If they are offering to pay you everything you are owed for the work performed already, then you need to determine if you are satisfied with that or you want to pursue the money that would be due on the remainder of the contract. If you want to pursue the money for the remainder of the contract because they breached the contract then do not sign the waiver and file for arbitration.
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