My capital partners want assurance that the electronic lien waiver has been supported in court as legally binding.
1 reply
Dec 27, 2018
To my knowledge, electronically signed lien waivers have not been challenged in a California court. Of course, that's only indicative that no one has sued over the issue - and certainly not an indication that electronically signed lien waivers are invalid. Still, let's take a look at some relevant factors. For one, under § 8126 of the California Civil Code "An oral or written statement purporting to waive, release, impair or otherwise adversely affect a lien or claim is void and unenforceable and does not create an estoppel or impairment of the lien or claim unless either of the following conditions is satisfied:
(a) The statement is pursuant to a waiver and release under this article.
(b) The claimant has actually received payment in full for the claim." Now let's jump to §1633.7 of the California Civil Code. Under that section "(a) A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
(b) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.
(c) If a law requires a record to be in writing, an electronic record satisfies the law.
(d) If a law requires a signature, an electronic signature satisfies the law." Thus, that a lien waiver is electronically signed will have no effect on the enforceability of the waiver. § 8126 of the Civil Code may demand that certain lien waiver forms be utilized - but the fact that such a waiver takes electronic form is irrelevant to its enforceability under §1633.7. Further, there is strong case law in support of electronic signatures for other California documents and contracts. Plus, as long as payment is actually made, the form of the waiver is immaterial under § 8126(b).