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Idaho Waivers

  • Lien rights can be waived in a contract before performing any work, but only if it is clear there is consideration for the waiver.
  • Pay-if-paid clauses may also prospectively waive lien rights, but there must be consideration for the waiver.
  • In one significant Idaho appellate case the attempted waiver of a Claim of Lien was held unenforceable where procured upon a promise to pay, but payment was not made. 
    Pierson v. Sewall 97 Idaho 38, 539 P. 2d 590 (1975).
  • “Paid if Paid” is enforced if explicit.
  • “Pay when Paid” suggests time for payment.
  • Pay-when-paid clause in the subcontract or purchase order does create a condition precedent to payment.

Retainage Provisions

Public

  • 54-1926. Performance and payment bonds required of contractors for public buildings and public works of the state, political subdivisions and other public instrumentalities -- Requirements for bonds -- Governmental obligations Public bodies requiring a performance bond or payment bond in excess of fifty percent (50%) of the total contract amount shall not be authorized to withhold from the contractor or subcontractor any amount exceeding five percent (5%) of the total amount payable as retainage. Further, the public body shall release to the contractor any retainage for those portions of the project accepted by the contracting public body and the contractors as complete within thirty (30) days after such acceptance. Contractors, contracting with subcontractors pursuant to contract work with a public body, shall not be authorized to withhold from the subcontractor any amount exceeding five percent (5%) of the total amount payable to the subcontractor as retainage. The contractor shall remit the retainage to the subcontractor within thirty (30) days after completion of the subcontract.  For the construction of projects involving irrigation and drainage, 10 percent retainage is required until final completion. IDAHO CODE § 42-2944.

Private

  •  29-115. Construction contracts.  In any contract relating to the construction of any private work of improvement, the retention proceeds withheld by the owner from the original contractor or by the original contractor from any subcontractor from any payment shall not exceed five percent (5%) of the payment and in no event shall the total retention withheld exceed five percent (5%) of the contract price. However, the five percent (5%) maximum that may be withheld does not apply if the original contractor or the subcontractor fails to provide a performance bond issued by a surety acceptable to the owner or original contractor if requested to do so by the owner or original contractor respectively. The five percent (5%) maximum shall not apply to any contract for the performance of a private work of improvement to residential real property consisting of one (1) to four (4) units occupied or to be occupied by the owner.