Can Contractors File a Lien for Unpaid Work?

How About This asks: "Typically contractors are considered unsecured creditors, and if a company is having financial problems it is the unsecured creditors that usually lose out the most, or at least that's my understanding. Is it possible for a contractor that did software design and programming work to file a lien against a company for not paying for work performed? My searches have revealed references to mechanic's liens against land and property, but nothing directly with technology/computer related areas. Anyone have any links to sites or pages with this information? Or references to good (CA) lawyers in this field that can explain things (and has a reasonable initial consultation fee since obviously money is in short supply)."

Comments

Interesting

[4of12]

<ianal>

IIRC, mechanics liens are not "active" devices for securing payment, but "passive" devices that prevent the property owner from getting a mortgage or otherwise transferring his asset by sale. A good title search puts the brakes on any kind of transfer, so they have to settle with you before selling assets with recorded titles and deeds like real property.

I dunno if you need a contractor's licences to file a mechanics lien, but I think there may also be liens designed for suppliers of materials that are left unjustly unpaid.

</ianal>

Check your contract

[bwt]

By default, independent software contractors own the copyright on work they produce. Unless you specifically signed over the rights, you probably still own it. Normally if they pay you, then they can use it (that's what they are buying). If they haven't paid you they may be commiting copyright infringement by using your code after you inform them that you have not authorized them to use it unless they pay. If they have revenue flow tied to the software, you might be able to threaten them with an injunction (but see below).

Even if you have signed over the rights, if they breach the contract that transfers the rights by not paying you, then the whole contract might be thrown out.

Unfortunately, if they are in bankruptcy, you usually can't sue them until they come out of it. However, if you send them a C&D letter informing them that you own the copyright and want them to stop using it and they blow you off, then they will be notching it up to "willful" violation which has hefty penalties. It is very rare for a company to completely liquidate, so eventually you have some leverage.

You absolutely need a lawyer (IANAL). Look up the names of some on some of the filings in the DVD-CCA case -- that was in California.

Re:Check your contract

[glenstar]

Also check to see if there is an AAA (American Arbitrator Association) clause in the contract. If that is the case, then you *must* use AAA for any disputes.

Re:Check your contract

[ScuzzMonkey]

But if you plumb more deeply, you'll find that a work made for hire is not defined so simply as you think. In essence, work for hire is not defined at all by who is paying for it, but by the status of the person producing it and any agreements they've reached with the person paying for it. Works for hire are primarily produced by employees; a work produced by a contractor, except under narrow and mutually agreed upon circumstances, is the intellectual property of the contractor, and he or she can resell it as often as they'd like.

IANAL either, but I make sure to check the definitions because I know how sneaky they can be. :)