Understanding the Implications of Signing a Release of Claims
In the construction industry in California, workers and subcontractors often deal with legal documents that can impact their rights. One common document is a “Release of Claims,” which is usually signed in exchange for payment. It’s very important to understand what signing this document means before you put your name on it. Not knowing the implications can lead to losing your legal rights to seek full payment or legal remedies down the road.
What is a Release of Claims?
A Release of Claims is a legal document that waives certain rights. In the context of construction work, this form is usually given to a worker, subcontractor, or supplier in exchange for a payment. Once this document is signed, you may no longer be able to file a lien or pursue additional money for the work or materials provided during the specified time period.
There are two main types of releases in California:
- Conditional Release: Becomes effective only once payment is actually received.
- Unconditional Release: Waives your rights regardless of whether the payment goes through or not.
Why Construction Workers Should Be Careful
Many workers in California may feel pressure to sign a release in order to get paid. However, if you sign an unconditional release before you’ve actually received payment, and the payment ends up bouncing or not arriving at all, you may lose your legal right to file a mechanics lien or take other action. This could leave you unpaid for the work you’ve already done.
A conditional release offers more protection because it confirms that you will waive your rights only if payment is made. This is a safer option for workers and subcontractors, especially when there is concern that the payment might not be guaranteed.
Timing Matters
In California, construction workers have specific deadlines to file a mechanics lien, which is a legal claim against the property for unpaid work. If you sign a release for the time period you worked but haven’t filed your lien yet, and you later find your payment is missing, your ability to file a lien may be gone forever. That’s why it’s essential to understand what period of time the release covers and whether it is conditional or unconditional.
Your Rights Under California Law
California law provides standard forms for conditional and unconditional releases related to progress payments and final payments. These forms are outlined in California Civil Code Sections 8120–8138. Using the correct form is important for protecting your rights. If you’re unsure which form is appropriate, you should consult with a lawyer or a labor rights organization.
Final Thoughts
Signing a release of claims is not just a formality. For construction workers in California, it’s a binding agreement that can affect your ability to get paid fully and fairly. Always read the document carefully, make sure the payment has cleared before signing an unconditional release, and never hesitate to ask questions. Your financial security may depend on it.