Notice of Contract: Everything You Need to Know
A notice of contract is the knowledge of information of specific facts or of a certain state of affairs and the formal papers that provide this information.3 min read
2. What Is a Notice of Contract?
3. Why File a Notice of Contract?
A notice of contract is defined as the knowledge of information of specific facts or of a certain state of affairs and the formal papers that provide this information. Notice is given directly to the involved party. There is both implied notice and express notice, which are different. Implied notice is inferred or deduced from the situation instead of from explicit or direct words. Express notice is when someone actually reads or hears the notice.
Legal Definition of Notice
There is also constructive notice, which is where the court decides a person should have known. This can be based off a legal relationship, such as partnerships that are law governing, where every party has knowledge of all parts of the business. If one partner participates in transactions that are dishonest, it's presumed the other partners know, whether or not they had actual knowledge of the transaction.
In some cases regarding real property purchase, a person will be charged with an inquiry notice. This is when a person wants to purchase land and has the obligation to verify the property's title to see if the land is subject to any encumbrances. This can include the following:
- Right of ways
- Unpaid taxes
While the inquiry notice looks closely at recorded documents, the notice recording statutes say that it's invalid to have any conveyance of a property that's unrecorded. A notice is crucial to legal proceedings integrity, where due process needs legal action that can't be taken until the notice and a chance to be heard are observed. The person giving the notice initiates the legal proceedings to the person who's affected. If someone gets accused of a crime, they need to be notified of their charges.
Many municipalities and states have a notice of claims provisions in their ordinances and statutes that say a notice of claim needs to be filed before a lawsuit begins and within a reasonable timeframe. This is often three to six months after their injury occurs. The notice needs to include what the date of the injury was, when it happened, and any other important facts to show that the plaintiff has a reasonable cause of action.
It's also essential to give notice when ending legal relationships, such as a notice to quit given to the landlord by the tenant that states the tenant has the intention to give up their possession of the property by a certain day. This can be the opposite as well, where the landlord gives the tenant a notice saying they will regain their possession of the property by a specific day. Notice can often refer to facts that are commonly known that the administrative agency or court takes into evidence during the hearing or trial.
What Is a Notice of Contract?
When a contractor and homeowner complete a contract, the notice of contract needs to be filed with the mortgage office in order for the parties to preserve their privileges and claims later. The information that's mandatory is in Louisiana Revised Statute 9:4811 and includes the price, signatures of the contractor and the owner, when the payment will be received, a description of what work will be done, description of the property where the work will be done, and the mailing addresses of the parties.
Why File a Notice of Contract?
It's important to file the notice of contract since it helps to figure out when the tolling period starts for filing liens. This can be complicated, as numerous parties are affected and involved in this filing, including the contractor. If the contractor fails to file the notice for projects that are over $25,000, they can lose their right to file a lien later. That means if the contractor wants to retain their rights, the notice of contract needs to be filed before they begin their work according to the Louisiana Revised Statute 9:4820.
When the notice is filed correctly, the contractor will have up to sixty days to file their lien. When it comes to a subcontractor and a correct notice of contract, the countdown to file the lien starts after the notice of termination is filed, not based on when the project is completed.
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