CONSTRUCTION STOP NOTICE
(State of Arkansas)
TABLE OF CONTENTS
- Document Header.........................................................1
- Definitions.............................................................2
- Operative Provisions....................................................3
- Representations & Warranties............................................4
- Covenants & Restrictions................................................5
- Default & Remedies......................................................5
- Risk Allocation.........................................................6
- Dispute Resolution......................................................6
- General Provisions......................................................7
- Execution Block........................................................8
Page numbers are provided for reference only and should be adjusted after final formatting.
1. DOCUMENT HEADER
1.1 Title and Parties
This Construction Stop Notice (“Stop Notice”) is issued by [CLAIMANT LEGAL NAME], a [state] [entity type] with a principal place of business at [address] (“Claimant”) to:
a. [OWNER LEGAL NAME], a [state] [entity type] with a principal place of business at [address] (“Owner”);
b. [CONTRACTOR LEGAL NAME], a [state] [entity type] with a principal place of business at [address] (“Contractor”); and
c. (If applicable) [CONSTRUCTION LENDER NAME], a [state] [entity type] with a principal place of business at [address] (“Lender”).
1.2 Recitals
A. Claimant furnished labor, services, equipment, and/or materials (“Work”) for the improvement of the real property commonly known as [Project Name / Street Address, City, County, Arkansas ZIP] (the “Project”) pursuant to an agreement with [identify contracting party] dated [date] (the “Subcontract”).
B. The Work was performed at the request and for the benefit of the Project.
C. The sum of $ [amount in figures] ([amount in words]) (the “Unpaid Amount”) remains due and owing for the Work.
D. Arkansas mechanics- and materialmen-lien law (the “Arkansas Lien Law”) authorizes a claimant that has satisfied all statutory prerequisites to serve a stop notice on the Owner and, where applicable, the Lender, thereby obligating them to withhold sufficient funds otherwise payable to the Contractor to satisfy the Unpaid Amount.
E. Claimant desires to protect its lien and payment rights by the timely service and filing (if required) of this Stop Notice.
1.3 Effective Date and Jurisdiction
This Stop Notice is effective as of [DATE] (the “Effective Date”) and is governed exclusively by the Arkansas Lien Law and other applicable Arkansas statutes, rules, and regulations (collectively, “State Lien Law”).
[// GUIDANCE: Service. Arkansas law requires personal delivery or certified mail with return receipt requested on each party entitled to notice. Attach proof of service after execution.]
2. DEFINITIONS
For ease of reference, capitalized terms used but not defined in the text have the following meanings:
“Bond” means a payment bond meeting the surety, penal-sum, and filing requirements of the Arkansas Lien Law sufficient to discharge this Stop Notice.
“Claim Amount” means the Unpaid Amount plus all allowable interest, costs, and attorney fees.
“Release” means a written, unconditional release of Stop Notice in recordable form executed by Claimant.
“Stop Period” means the period commencing on the Effective Date and ending upon the earlier of (a) receipt in good funds of the Claim Amount, or (b) delivery of a Release by Claimant.
“Work” has the meaning given in Recital A.
3. OPERATIVE PROVISIONS
3.1 Notice of Unpaid Amount
Claimant hereby notifies Owner and Lender, pursuant to applicable State Lien Law, that the Claim Amount is due and unpaid for Work performed on the Project.
3.2 Mandatory Withholding
Owner and Lender SHALL, upon receipt of this Stop Notice, immediately withhold, segregate, and not disburse to Contractor or any other person funds in an amount not less than the Claim Amount pending (a) payment in full to Claimant, (b) securing of a Bond, or (c) expiration of statutory time limits, whichever occurs first.
3.3 Duration of Withholding
The withholding shall remain in effect throughout the Stop Period. Payments made in violation of this Stop Notice may subject the paying party to direct liability to Claimant to the extent of any prejudice thereby suffered.
3.4 Bonding to Release Stop Notice
- Bond Right. Owner, Contractor, or Lender may discharge this Stop Notice at any time by procuring and filing a Bond fully compliant with the Arkansas Lien Law.
- Bond Form. The Bond must:
a. Be executed by a corporate surety licensed in Arkansas;
b. Be in an amount not less than 1.25 × the Claim Amount or such other statutory multiple as may apply; and
c. Name Claimant as primary obligee. - Effect of Bond. Upon Claimant’s receipt of written proof of the Bond, Claimant shall deliver a Release within five (5) business days.
3.5 Obligation to Release
Within five (5) business days after (a) Claimant’s receipt of the Claim Amount in collected funds, or (b) effective filing of a Bond, Claimant shall execute and deliver a Release to Owner, Contractor, and Lender.
3.6 Reservation of Mechanic’s-Lien Rights
Nothing in this Stop Notice relinquishes or impairs any lien, bond, or other statutory rights Claimant may possess under State Lien Law.
3.7 Conditions Precedent
Claimant represents that it has satisfied all statutory prerequisites to the validity of this Stop Notice, including without limitation any required preliminary notice(s) and timely service/filing.
4. REPRESENTATIONS & WARRANTIES
Claimant represents and warrants to each Noticee that:
a. All statements contained herein are true and correct to the best of Claimant’s knowledge, information, and belief.
b. Claimant has duly performed the Work in a good and workmanlike manner in accordance with the Subcontract.
c. The Unpaid Amount is justly due after allowing all credits and offsets known to Claimant at this time.
d. Claimant has not received payment for the Work.
e. Claimant has complied with all licensing, registration, and statutory requirements applicable to its trade.
The foregoing representations survive the service of this Stop Notice.
5. COVENANTS & RESTRICTIONS
5.1 Cooperation. Claimant shall reasonably cooperate with Owner and Lender to allow prompt verification of the Claim Amount.
5.2 No Waiver. Failure by Claimant to enforce any provision of this Stop Notice shall not constitute a waiver of any right or remedy.
6. DEFAULT & REMEDIES
6.1 Events of Default
a. Failure of Owner or Lender to withhold funds as required.
b. Disbursement of withheld funds in violation of Section 3.2.
c. Failure of Claimant to file a Release as required by Section 3.5 after payment or bonding.
6.2 Cure Period
The defaulting party shall have five (5) business days after written notice to cure any Event of Default, except that unlawful disbursement of funds is a non-curable default.
6.3 Remedies
a. Injunctive Relief. Claimant is entitled to temporary, preliminary, and permanent injunctive relief preventing further disbursement of funds.
b. Monetary Relief. The defaulting party shall be liable to Claimant for the Claim Amount, prejudgment interest, costs, and reasonable attorney fees.
c. Additional Relief. All other statutory and equitable remedies remain available.
[// GUIDANCE: In Arkansas, attorney-fee recovery in lien/stop-notice actions is generally permitted when provided by statute or contract. Check latest authority.]
7. RISK ALLOCATION
7.1 Indemnification—Bonding Requirements
If a Bond is furnished, the principal and surety jointly and severally agree to indemnify and hold harmless Claimant from and against all losses, costs, and expenses (including attorney fees) arising out of any failure to pay the Claim Amount.
7.2 Limitation of Liability
Liability of Owner and Lender under this Stop Notice is limited to the lesser of (a) funds actually withheld pursuant hereto, or (b) the Claim Amount, except to the extent greater liability is imposed by statute for wrongful disbursement.
7.3 Force Majeure
A party’s non-performance is excused to the extent rendered impossible by force-majeure events enumerated under Arkansas law, provided that payment obligations already accrued are not excused.
8. DISPUTE RESOLUTION
8.1 Governing Law
This Stop Notice and all disputes arising hereunder are governed by the laws of the State of Arkansas, without regard to conflict-of-laws principles.
8.2 Forum Selection
Exclusive jurisdiction and venue lie in the state courts located in [County Name] County, Arkansas.
8.3 Arbitration / Jury Trial
Arbitration is not applicable. No jury-trial waiver is contained herein.
8.4 Injunctive Relief Preservation
Nothing herein limits Claimant’s right to seek equitable or injunctive relief, including orders preventing disbursement of funds.
9. GENERAL PROVISIONS
9.1 Amendments and Waivers
No amendment or waiver of any provision of this Stop Notice shall be effective unless in a writing signed by Claimant and the affected party(ies).
9.2 Assignment
None of the parties may assign its rights or obligations hereunder without the prior written consent of the others, except Claimant may assign its rights to payment and security to a secured lender.
9.3 Successors and Assigns
This Stop Notice binds and benefits the parties and their respective successors and permitted assigns.
9.4 Severability
If any provision is held invalid or unenforceable, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to achieve its original intent.
9.5 Integration
This Stop Notice constitutes the complete and exclusive statement of the notice provided and supersedes all prior oral or written statements related to its subject matter.
9.6 Counterparts; Electronic Signatures
This Stop Notice may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures transmitted via PDF, facsimile, or electronic signature platform are binding.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the undersigned Claimant has executed this Stop Notice as of the Effective Date.
[CLAIMANT LEGAL NAME]
By: ______
Name: [printed name]
Title: [title]
Date: [date]
STATE OF __ )
: ss.
COUNTY OF __ )
Subscribed and sworn to before me on the _ day of __, 20_, by ___ as ____ of [CLAIMANT LEGAL NAME].
Notary Public
My commission expires: _______
[Add standard notarial block required by Arkansas law.]
PROOF OF SERVICE
I, [Name], declare that on [date], I served the foregoing Stop Notice by:
☐ Personal delivery
☐ Certified mail, return receipt requested
☐ Other statutorily-approved method: ______
to each of the following parties at the addresses stated on page 1:
1. Owner
2. Contractor
3. (If applicable) Lender
I declare under penalty of perjury under the laws of the State of Arkansas that the foregoing is true and correct.
Signature
Date: _______
[// GUIDANCE: Attach USPS certified-mail receipts or signed delivery acknowledgments to bolster evidentiary foundation.]
END OF DOCUMENT