STATUTORY STOP NOTICE AND PAYMENT-WITHHOLD DIRECTIVE

(Wisconsin – Private Construction Project)

[// GUIDANCE: This is a comprehensive template intended for use by Wisconsin‐licensed attorneys representing unpaid subcontractors, suppliers, or laborers (“Claimant”). It is drafted to comply with Wis. Stat. ch. 779 (Construction Liens) and incorporates stop-notice mechanics, bonding options, and release procedures. Customize all bracketed text, review statutory deadlines, and confirm service requirements before use.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

1.1 Title. Statutory Stop Notice and Payment-Withhold Directive (the “Stop Notice”).

1.2 Parties.
a. “Claimant”: [NAME OF CLAIMANT], a [STATE] [ENTITY TYPE] with its principal place of business at [ADDRESS].
b. “Owner”: [NAME OF OWNER], residing/organized at [ADDRESS].
c. “Prime Contractor”: [NAME OF PRIME CONTRACTOR], a [STATE] [ENTITY TYPE] at [ADDRESS].
d. “Construction Lender” (if any): [NAME OF LENDER] at [ADDRESS].

1.3 Project. Improvement commonly known as “[PROJECT NAME]” located at [PROPERTY ADDRESS] (the “Project”).

1.4 Effective Date. This Stop Notice is effective upon the earliest of (i) personal service, (ii) certified mail receipt, or (iii) statutory posting date (the “Effective Date”).

1.5 Governing Law & Jurisdiction. Wisconsin construction lien law, Wis. Stat. ch. 779 (collectively, “State Lien Law”); exclusive venue in the state courts of [COUNTY], Wisconsin.

2. DEFINITIONS

The following terms are used herein with the meanings set forth below:

“Amount Claimed” – the unpaid contract balance of $[AMOUNT], exclusive of interest, costs, and attorneys’ fees.

“Bond” – a surety bond meeting State Lien Law requirements, issued by a Treasury-listed surety authorized in Wisconsin, conditioned on payment of the Amount Claimed plus statutory interest, costs, and fees.

“Claimed Labor and Materials” – labor, services, equipment, or materials furnished by Claimant for the Project through [LAST DATE OF WORK].

“Lien Claim” – any construction lien claim that Claimant is entitled to, or may hereafter, record under State Lien Law.

“Release Event” – (i) written payment in full to Claimant, (ii) posting of a Bond acceptable to Claimant, or (iii) final, non-appealable court order disallowing the Amount Claimed.

“Stop Notice Funds” – undisbursed construction funds otherwise payable to the Prime Contractor in connection with the Project.

3. OPERATIVE PROVISIONS

3.1 Payment Withhold Directive. Pursuant to State Lien Law, Claimant hereby directs Owner and any Construction Lender to immediately withhold, impound, and secure Stop Notice Funds equal to the Amount Claimed, together with a reasonable reserve for statutory interest, costs, and fees.

3.2 Scope of Withhold.
a. The withhold applies to all progress, retention, and final payments not yet disbursed to the Prime Contractor.
b. Owner/Lender shall segregate Stop Notice Funds in a trust or escrow account and shall not release such funds except as expressly permitted under § 3.5.

3.3 Deadline Compliance. Claimant affirms that this Stop Notice is served within all applicable statutory time periods relative to its last furnishing of Claimed Labor and Materials.

3.4 Notice to Prime Contractor. Concurrent with service on Owner/Lender, Claimant has served a true copy of this Stop Notice on the Prime Contractor in the manner required by State Lien Law.

3.5 Release of Stop Notice Funds. Owner/Lender may release Stop Notice Funds only upon occurrence of a Release Event and upon not less than five (5) business days’ prior written notice to Claimant.

4. REPRESENTATIONS & WARRANTIES

Claimant represents and warrants to Owner and Construction Lender that:

a. It has duly furnished the Claimed Labor and Materials for the Project;
b. The Amount Claimed is presently due and owing and no part has been paid;
c. Claimant has complied with all prerequisite notice obligations, including any preliminary notice of lien rights; and
d. Claimant possesses full authority to issue this Stop Notice.

All representations and warranties shall survive satisfaction or discharge of the Stop Notice until final resolution of any Lien Claim.

5. COVENANTS & RESTRICTIONS

5.1 Claimant Covenants.
a. To pursue its Lien Claim, if necessary, within the statutory limitations period;
b. To release the Stop Notice promptly upon occurrence of a Release Event; and
c. To cooperate in reasonable Bonding procedures as set forth in § 7.2.

5.2 Owner/Lender Covenants.
a. To maintain segregation of Stop Notice Funds;
b. To notify Claimant of any intended payment, bond posting, or interpleader action affecting the Stop Notice Funds; and
c. Not to condition withholding on execution of waivers broader than required to effect a Release Event.

6. DEFAULT & REMEDIES

6.1 Events of Default.
a. Failure of Owner/Lender to withhold or maintain Stop Notice Funds;
b. Release of Stop Notice Funds in violation of § 3.5;
c. Failure of Claimant to file its Lien Claim within statutory deadlines.

6.2 Cure. The defaulting party shall have five (5) business days after written notice to cure any curable default.

6.3 Remedies.
a. Injunctive relief compelling compliance and preserving Stop Notice Funds;
b. Recovery of the Amount Claimed, plus interest at the maximum legal rate;
c. Attorneys’ fees and costs incurred in enforcement;
d. Any other remedy available under State Lien Law, in equity, or at law.

7. RISK ALLOCATION

7.1 Limitation of Liability. Liability of Owner and Construction Lender under this Stop Notice shall not exceed the Stop Notice Funds actually withheld (the “Liability Cap”), except in cases of bad faith or willful misconduct.

7.2 Bonding Requirements.
a. Owner or Prime Contractor may discharge this Stop Notice by posting a Bond in an amount not less than 125 % of the Amount Claimed, conditioned for payment thereof.
b. Upon Claimant’s written confirmation of Bond sufficiency, Claimant shall execute a conditional release of the Stop Notice, effective upon posting and delivery of the Bond.
c. The Bond shall name Claimant as principal obligee and conform to Wis. Stat. ch. 779 bonding provisions.

7.3 Indemnification. Prime Contractor shall indemnify and hold Owner and Construction Lender harmless from all losses, costs, and liabilities arising out of or relating to this Stop Notice, except to the extent caused by Owner/Lender’s breach of § 5.2.

7.4 Force Majeure. No party shall be liable for delays in performance caused by events beyond its reasonable control; however, monetary obligations (including withholding Stop Notice Funds) are never excused.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Stop Notice and any related dispute shall be governed by State Lien Law and the internal laws of the State of Wisconsin without regard to conflict-of-law principles.

8.2 Forum Selection. Exclusive jurisdiction and venue shall lie in the circuit courts of [COUNTY], Wisconsin.

8.3 Injunctive Relief. Each party acknowledges that breach of this Stop Notice may cause irreparable harm for which monetary damages are inadequate; therefore, injunctive relief, including orders compelling or restraining payment, shall be available without bond to the extent permitted by law.

9. GENERAL PROVISIONS

9.1 Notices. All notices must be in writing and delivered by personal service, certified mail (return receipt requested), or nationally recognized overnight courier to the addresses stated in § 1.2 (or as later designated).

9.2 Amendments & Waivers. No amendment or waiver shall be binding unless in writing and signed by the party against whom enforcement is sought. Waiver of any breach shall not constitute waiver of any other or subsequent breach.

9.3 Assignment. Claimant may assign its rights hereunder in connection with assignment of its Lien Claim; otherwise, no party may assign this Stop Notice without prior written consent of the others.

9.4 Severability. If any provision is held invalid, the remainder shall be enforced to the fullest extent permitted, and the parties shall substitute an enforceable provision most nearly reflecting the original intent.

9.5 Integration. This Stop Notice embodies the entire understanding among the parties regarding the subject matter and supersedes all prior oral or written communications.

9.6 Counterparts & Electronic Signatures. This Stop Notice may be executed in counterparts, each of which is deemed an original, and all of which constitute one instrument. Signatures transmitted electronically (e.g., PDF, DocuSign) shall be deemed original signatures for all purposes.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the undersigned Claimant executes this Stop Notice as of the Effective Date set forth above.

[// GUIDANCE: Notarization is recommended for evidentiary purposes but not mandated by State Lien Law. Insert acknowledgement block below if desired.]

ACKNOWLEDGEMENT OF RECEIPT

Owner and, if applicable, Construction Lender acknowledge receipt of this Stop Notice on the date indicated below and agree to comply with its terms.

[// GUIDANCE: Attach supporting documentation (e.g., invoices, delivery tickets, sworn statement) to substantiate the Amount Claimed. Maintain proof of service for each recipient to preserve enforcement rights.]