STOP NOTICE AND DEMAND FOR WITHHOLDING OF CONSTRUCTION FUNDS
(Wyoming)
[// GUIDANCE: Insert on firm letterhead or pleading paper as required by local practice.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
STOP NOTICE AND DEMAND FOR WITHHOLDING
Effective Date: [DATE]
A. Claimant: [NAME OF SUBCONTRACTOR/SUPPLIER] (“Claimant”)
B. Direct Contractor: [NAME OF PRIME/GENERAL CONTRACTOR] (“Contractor”)
C. Owner: [NAME OF PROPERTY OWNER] (“Owner”)
D. Construction Lender (if any): [NAME OF LENDER] (“Lender”)
E. Project: [PROJECT NAME / DESCRIPTION] located at [STREET ADDRESS, CITY, WY ZIP] (“Project”)
Recitals
1. Claimant furnished labor, services, equipment, and/or materials (“Work”) for the Project pursuant to an agreement with Contractor dated [AGREEMENT DATE].
2. As of the Effective Date, Claimant is owed $[AMOUNT] for the Work (the “Claimed Sum”), for which payment is past due.
3. Claimant possesses lien rights under the Wyoming Mechanics’ and Materialmen’s Liens Act, Wyo. Stat. Ann. § 29-1-101 et seq. (the “Lien Act”).
4. To protect its lien rights, Claimant issues this Stop Notice demanding that Owner and/or Lender withhold disbursement of funds otherwise payable to Contractor in an amount sufficient to satisfy the Claimed Sum, plus allowable interest, costs, and attorney fees, pending resolution of the Claim.
2. DEFINITIONS
For purposes of this Stop Notice, capitalized terms have the meanings set forth below.
- “Applicable Law” means the Lien Act and any other Wyoming statutes or regulations governing construction payment rights, together with related case law and equitable principles.
- “Bond” means a statutory bond executed by a surety authorized to transact business in Wyoming, conditioned upon payment of the Claimed Sum as further described in Section 7.1.
- “Claim” means the Claimant’s mechanics’ lien claim and all rights incidental thereto.
- “Release Procedures” means the procedures for releasing withheld funds or recording a lien release under Section 3.6 of this Stop Notice and Applicable Law.
- “Stop Notice” means this written notice and demand for withholding issued pursuant to Section 3.1.
3. OPERATIVE PROVISIONS
3.1 Issuance of Stop Notice
Claimant hereby notifies Owner and Lender and demands, pursuant to Applicable Law, that they withhold from Contractor funds otherwise due or to become due, in an amount no less than the Claimed Sum, together with any additional sums recoverable under the Lien Act (“Withheld Funds”).
3.2 Amount of Withheld Funds
Owner and Lender shall withhold the lesser of:
a. The unpaid contract balance due or to become due to Contractor; or
b. 150% of the Claimed Sum to cover potential interest, costs, and attorney fees.
[// GUIDANCE: Some practitioners withhold 125% or 150% depending on statutory or contractual requirements. Adjust as appropriate.]
3.3 Manner of Withholding
Withheld Funds shall be segregated and held in trust (or an equivalent escrow or controlled account) and shall not be disbursed to Contractor or any other party except in accordance with the Release Procedures.
3.4 Service of Stop Notice
This Stop Notice is served upon Owner and Lender by [PERSONAL DELIVERY / CERTIFIED MAIL, RETURN RECEIPT REQUESTED / OTHER], in compliance with Wyoming law. Proof of service is attached as Exhibit A.
3.5 Conditions Precedent
Claimant represents that it has complied with all notice, timing, and filing requirements under Applicable Law, including but not limited to timely provision of any required preliminary notice and timely recording (or intent to record) of a lien statement.
3.6 Release Procedures
Withheld Funds may be released only upon the earliest of:
a. Written authorization from Claimant confirming receipt of full payment of the Claimed Sum;
b. Posting of a Bond meeting the requirements of Section 7.1;
c. Entry of a final, unappealable judgment resolving the Claim; or
d. Mutual written agreement of Owner, Contractor, and Claimant.
3.7 Survival
Owner’s and Lender’s obligations under this Stop Notice survive any termination of the Contractor’s agreement with Owner or Lender and continue until the Claim is resolved in accordance with Section 3.6.
4. REPRESENTATIONS & WARRANTIES
4.1 Claimant represents and warrants that:
a. The Work was duly performed and incorporated into the Project in a workmanlike manner;
b. The Claimed Sum is justly due and unpaid, and all offsets, payments, and credits have been accurately applied;
c. Claimant has not waived its lien or stop-notice rights; and
d. Claimant will promptly release or discharge any lien of record upon full payment.
4.2 Survival and Reliance
The representations and warranties in this Section survive issuance of this Stop Notice, and Owner and Lender are entitled to rely upon them.
5. COVENANTS & RESTRICTIONS
5.1 Claimant Covenants
a. To commence any required legal action to enforce the Claim within the statutory limitations period;
b. To cooperate reasonably with Owner and Lender in verifying the Claim; and
c. To execute a sufficient lien release within [NUMBER] days after receipt of cleared funds satisfying the Claimed Sum.
5.2 Owner/Lender Covenants
Owner and Lender covenant to:
a. Maintain the Withheld Funds in accordance with Section 3.3;
b. Provide Claimant with written notice of any Bond furnished under Section 7.1; and
c. Refrain from disbursing any Withheld Funds except as permitted by Section 3.6.
6. DEFAULT & REMEDIES
6.1 Events of Default
a. Failure by Owner or Lender to withhold funds as required herein;
b. Disbursement of Withheld Funds in violation of Section 3.6; or
c. Failure by Claimant to prosecute the Claim in accordance with Applicable Law.
6.2 Cure Period
A defaulting party must cure any default within ten (10) business days after written notice of default.
6.3 Remedies
If a default is not timely cured, the non-defaulting party may exercise any and all rights and remedies available at law or equity, including:
a. Injunctive relief compelling compliance with the withholding obligations;
b. Recovery of damages proximately caused by the default; and
c. An award of reasonable attorney fees and costs incurred in enforcement.
7. RISK ALLOCATION
7.1 Bonding Requirements
a. Owner or Contractor may secure release of the Stop Notice by furnishing a Bond in an amount not less than 150% of the Claimed Sum, naming Claimant as obligee, conditioned on payment of any judgment or settlement of the Claim.
b. Upon receipt of a conforming Bond, Claimant shall promptly deliver a written Release of Stop Notice.
7.2 Limitation of Liability
Owner’s and Lender’s liability to Claimant is limited to the lesser of (i) the Withheld Funds and (ii) the amount required to be withheld under Applicable Law. Owner and Lender shall not be liable for consequential or punitive damages arising from compliance with this Stop Notice.
7.3 Force Majeure
No party is liable for delays or inability to perform obligations under this Stop Notice caused by events beyond its reasonable control, provided that such party promptly notifies the others and resumes performance when feasible.
8. DISPUTE RESOLUTION
8.1 Governing Law
This Stop Notice is governed by and construed in accordance with the laws of the State of Wyoming, without regard to conflict-of-law principles.
8.2 Forum Selection
Any action arising out of or relating to this Stop Notice shall be brought exclusively in the state courts located in [COUNTY], Wyoming, having jurisdiction over the Project, and each party irrevocably submits to the personal jurisdiction of such courts.
8.3 Arbitration
Not applicable.
8.4 Injunctive Relief
Nothing in this Section limits either party’s right to seek temporary, preliminary, or permanent injunctive relief to enforce the withholding obligations established herein.
9. GENERAL PROVISIONS
9.1 Amendments and Waivers
Any amendment or waiver of this Stop Notice must be in a signed writing by the party against whom enforcement is sought. No waiver of any default constitutes a waiver of any other default.
9.2 Assignment
None of the parties may assign or delegate its rights or obligations under this Stop Notice without the prior written consent of the other parties, except that Claimant may assign its Claim and rights hereunder as collateral to a financing institution.
9.3 Successors and Assigns
This Stop Notice is binding upon and inures to the benefit of the parties and their respective successors and permitted assigns.
9.4 Severability
If any provision of this Stop Notice is held invalid or unenforceable, the remaining provisions remain in full force, and the invalid provision will be interpreted to fulfill its intended economic purpose to the maximum extent permitted by law.
9.5 Integration
This Stop Notice constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether written or oral.
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 by facsimile, PDF, or electronic signature platform are deemed original for all purposes.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the undersigned have executed this Stop Notice as of the Effective Date.
Claimant:
[NAME OF CLAIMANT ENTITY]
By: _____
Name: [PRINTED NAME]
Title: [OFFICER TITLE]
Date: _________
Owner (Acknowledgment of Receipt):
[NAME OF OWNER]
By: _____
Name: [PRINTED NAME]
Title: [CAPACITY]
Date: _________
Lender (Acknowledgment of Receipt):
[NAME OF LENDER]
By: _____
Name: [PRINTED NAME]
Title: [CAPACITY]
Date: _________
VERIFICATION
STATE OF WYOMING )
: ss.
COUNTY OF [COUNTY] )
I, [NAME], being duly sworn, state: I am the [POSITION] of Claimant; I have read the foregoing Stop Notice and know the contents thereof; and the same is true of my own knowledge, except as to matters stated on information and belief, and as to those matters I believe them to be true.
[NAME]
Subscribed and sworn to before me this ___ day of [MONTH], 20__.
Notary Public
My commission expires: _______
[// GUIDANCE:
1. Attach Exhibit A – Proof of Service.
2. Confirm all statutory deadlines (pre-notice, filing, enforcement) under current Wyoming law.
3. Tailor bonding percentage and force majeure language to project contracts.
4. Consider recording this Stop Notice if project financing documents so require.
]