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Progress Payment Waiver Agreement

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Progress Payment Waiver Agreement

This Progress Payment Waiver Agreement ("Agreement") is made as of , by and between Owner Name: and Contractor Name: .

RECITALS

WHEREAS, Owner and Contractor are parties to a construction contract identified as Contract No.: for the project commonly known as located at .

WHEREAS, Contractor has submitted an invoice or application for progress payment identified as Invoice No.: in the amount of $ (the "Progress Payment"); and

WHEREAS, Contractor agrees to waive certain lien and claim rights to the extent set forth herein upon receipt of the Progress Payment in cleared funds.

NOW, THEREFORE

In consideration of the mutual covenants and the payment described in this Agreement, the parties agree as follows.

1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below:

"Project" means the work described in the Contract at the Project address referenced above. "Progress Payment" means the payment identified in this Agreement. "Lien Rights" includes mechanic's liens, stop notices, payment bond claims and any other claims for labor, materials, equipment or services furnished to the Project through the Effective Date.

2. CONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT

Subject to Section 3 below, upon Owner's payment to Contractor of the Progress Payment in cleared funds, Contractor hereby waives and releases to the extent of the Progress Payment the Contractor's Lien Rights arising out of labor, services, equipment or materials furnished to the Project through the Effective Date of this Agreement, except for claims reserved in writing pursuant to Section 5.

This waiver is: Conditional upon actual receipt and clearance of funds    Unconditional (effective upon delivery regardless of clearance)

3. EFFECTIVENESS CONDITION

If the Progress Payment is not paid, is reversed, charged back, not honored, or otherwise not actually received and cleared in Contractor's account, this Agreement shall be null and void and Contractor's Lien Rights shall not be waived or released. Contractor's obligations under this Agreement are expressly conditioned upon final and irrevocable payment.

4. APPLICATION AND RESERVATIONS

The waiver and release provided in Section 2 applies only to the portion of Contractor's Lien Rights equal to the Progress Payment and to the work, labor, materials and services furnished through the Effective Date. Contractor expressly reserves rights to unpaid amounts for work performed after the Effective Date and any claims properly listed in writing pursuant to Section 5.

5. EXCEPTIONS; ATTACHMENTS

Contractor shall attach or list below any amounts or claims it asserts are excluded from this waiver. Any amounts listed shall be specifically identified and supported by documentation.

6. REPRESENTATIONS AND WARRANTIES

Contractor represents and warrants that, to the best of its knowledge: (a) all work, labor, services, equipment and materials for which the Progress Payment is made were provided in accordance with the Contract; (b) Contractor has no knowledge of outstanding claims or liens not disclosed in Section 5; and (c) the person executing this Agreement on behalf of Contractor has authority to bind Contractor to the terms herein.

7. INDEMNITY

Contractor shall indemnify, defend and hold Owner harmless from and against any and all claims, losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees) which arise from or relate to Contractor's breach of the representations contained in Section 6 or Contractor's failure to pay lower-tier subcontractors, suppliers, or materialmen for the work covered by the Progress Payment.

8. PAYMENT DETAILS

9. NOTICES

Any notice required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below by personal delivery, certified mail, or reputable overnight courier.

10. AMENDMENT; WAIVER

This Agreement may be amended only by a writing signed by both parties. No waiver of any provision shall be effective unless in writing and signed by the party granting the waiver. A waiver of a breach shall not constitute a waiver of any other breach.

11. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the substantive laws of the state identified below, without regard to conflict of laws principles.

12. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations and understandings, whether written or oral.

13. SEVERABILITY

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect and the parties shall negotiate in good faith to replace the invalid provision with a valid provision that most closely approximates the parties' original intent.

14. COUNTERPARTS AND ELECTRONIC SIGNATURES

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Facsimile, electronic image or other electronic signatures shall be effective as originals.

15. CERTIFICATION

By signing below, Contractor certifies under penalty of perjury that the statements in this Agreement are true and correct to the best of Contractor's knowledge and that any payments described will be applied to satisfy the obligations for which they are intended.

Owner:

By:

Date:

Contractor:

By:

Date:

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What the Progress Payment Waiver Agreement Is and When It’s Used

A Progress Payment Waiver Agreement is a written statement used primarily in construction and project-based work to acknowledge receipt of a partial payment and to waive certain lien rights or stop-notice claims for the payment period specified. The document typically identifies the payor, payee, project, payment amount, and the period or invoice covered. Waivers can be full or partial and may be conditional on cleared funds. Properly drafted waivers clarify payment status, reduce future disputes over the covered payment, and provide a written record of liability release tied to the specified amount or timeframe.

Why a Clear Waiver Matters for Payments and Liens

A well-drafted waiver reduces the risk of later mechanic’s liens or stop-notice claims for the amounts covered, creates proof of payment, and helps owners and general contractors manage cash flow and retainage. Legal effect depends on precise wording and applicable state law, so clear conditional language and records of cleared funds are essential.

Why a Clear Waiver Matters for Payments and Liens

Who Typically Prepares, Signs, and Receives This Waiver

Typical parties include owners, general contractors, subcontractors, suppliers, and project accountants involved in invoicing and payment reconciliation.

  • General Contractor — protects owner and GC from future lien claims while confirming partial payment.
  • Subcontractor or Supplier — documents receipt of progress payment and preserves remaining payment rights.
  • Owner / Financial Officer — maintains records proving release of lien for covered amounts.

Each party’s priorities differ: payors need protection from later lien claims; payees need accurate receipts and conditional language when funds are not yet cleared.

Step-by-Step: How to Fill Out a Progress Payment Waiver Agreement

Follow a consistent sequence to reduce errors: identify the parties, confirm payment and cleared funds, specify the waiver scope, and obtain signatures.

  • 01
    Upload Document: Load the waiver template as a PDF or DOCX and confirm file integrity.
  • 02
    Enter Parties: Fill payor, payee, project, and contract identifiers exactly.
  • 03
    Specify Payment: Record amount, date, and whether the waiver is conditional on funds clearing.
  • 04
    Sign & Distribute: Obtain signatures, provide copies to stakeholders, and store executed copies.

How the Waiver Execution and Distribution Process Typically Flows

A standard execution path moves from preparation to signature, confirmation of cleared funds, and distribution of the executed waiver and related records.

  • Prepare Waiver: Populate all identification and payment fields and indicate conditional language if needed.
  • Obtain Signature: Signatory executes the waiver electronically or on paper per agreement terms.
  • Confirm Cleared Funds: Verify payment has cleared when waiver is conditional on funds.
  • Distribute Records: Send executed copies to all parties and retain for compliance.

Digital Signing and File Format Considerations

Use an eSignature platform that supports PDF and DOCX, strong audit trails, and relevant integrations to your accounting or project management system.

  • Integrations: Salesforce, NetSuite, Procore integrations available
  • File Formats: PDF and DOCX supported
  • Authentication: Email, SMS, or advanced KBA

Timing: When to Issue and Retain a Progress Payment Waiver

Timely execution and retention are important. Process waivers when payment is made or cleared and keep records for required retention periods.

When to Sign:

At or immediately after receipt of the payment specified

Conditional Signing:

Mark as conditional until funds clear to preserve rights

Final Waiver:

Issue only upon final payment and satisfaction of all obligations

Tax Reporting Link:

Retain copies for tax and 1099 verification purposes

Record Retention:

Keep executed waivers according to applicable retention rules

Key Milestones in a Typical Progress Payment Waiver Lifecycle

Track milestones from invoicing through final release to ensure waivers match payment events and that rights are protected until funds clear.

01

Invoice Issued

Payee issues invoice tied to specific work or materials

02

Payment Made

Payor transmits payment; record method and date

03

Waiver Executed

Payee signs waiver, noting conditional or unconditional status

04

Final Closeout

Final payment and unconditional releases completed

Common Preparation Mistakes to Avoid

  • Using overly broad language that unintentionally waives rights beyond the covered payment creates exposure to future disputes and possible forfeiture of claims.
  • Signing a waiver before funds clear removes leverage; make waivers conditional on cleared funds where appropriate to protect payees.
  • Omitting clear project identifiers or contract numbers makes the waiver ambiguous and may prevent enforcement against specific lien claims.
  • Failing to distribute or record the executed waiver promptly can complicate accounting, tax reporting, and lien defense.

Risks and Legal Consequences of an Incorrect Waiver

Lost Lien Rights: May permanently forfeit claims for covered amounts
Payment Disputes: Ambiguity invites litigation over scope and intent
Tax Implications: Incorrect records complicate 1099 or withholding compliance
Rejection Risk: Banks may reverse conditional payments if not clearly drafted
Notary Omissions: Missing acknowledgements can reduce enforceability in some states
Future Claims: Broad waivers can block legitimate subsequent recovery

eSignature Platform Pricing and Capability Snapshot

A concise vendor comparison for common eSignature needs; signNow appears first per platform data and supports HIPAA, audit trails, and bulk workflows. Confirm plan details with each vendor.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes Yes
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Real-World Examples and How Waivers Were Used

Two concise examples illustrate how companies used digital waivers to streamline payments and protect parties during project billing cycles.

Tim Martin — Martin Properties

Tim Martin’s team moved waivers online to reduce processing delays

  • Rapid mobile signing reduced turnaround time
  • I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back to their necessary parties efficiently.

Dan Rotelli — BIS

BIS prioritized certified security when choosing eSignature tools

  • SOC 2 focus improved confidence
  • We felt most comfortable with airSlate SignNow given their SOC 2 certification and strict focus on ESIGN and UETA act compliance.

Frequently Asked Questions About Progress Payment Waivers

Answers to common questions about enforceability, revocation, electronic signatures, and best drafting practices for waivers.


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Security and Compliance Items to Note When Using Electronic Waivers

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Certifications: SOC 2 Type II and ISO 27001 available
HIPAA: BAA available for protected health information
Audit Trail: Complete timestamp, IP, and action logs
Access Controls: SSO, 2FA, and role-based permissions
Retention: Reproducible records and exportable logs

Who Normally Signs and What Authority Is Required

General Contractor — Project Manager

The project manager or authorized procurement officer typically signs on behalf of a general contractor; their signature must be authorized by company policy to release lien rights for covered payments.

Subcontractor — Billing Administrator

A subcontractor’s billing manager or company officer should sign and include printed name and title to demonstrate authority to waive lien rights for specified amounts.

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