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Retained Funds Not Limited To Lienable Claims Retainage; Liens

Sunday, March 02, 2003 12:46 pm

Retained Funds Not Limited To Lienable Claims Retainage; Liens

The South Dakota Supreme Court has ruled that a contract allowed the project owner to withhold funds covering all potential claims, not just lienable claims.

Mid-Dakota Rural Water System, Inc. awarded a contract to Carstensen Contracting, Inc. to construct a water distribution pipeline in Hand and Hyde Counties. One provision of the contract stated: "The Contractor shall, at the Owner's request, furnish satisfactory evidence that all obligations have been paid, discharged or waived. If the Contractor fails to do so, the Owner may, after having notified the Contractor, either pay unpaid bills or withhold from the Contractor's unpaid compensation a sum of money de [...]

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