Whom to Contact:

Jane Adams
Senior Director, State Government Affairs
(202) 974-5206

Background

The plastics industry supports mold lien legislation because it provides molders and moldmakers with a means to obtain payment without having to resort to complicated and expensive paperwork and litigation. The plastics industry supports mold retention legislation because it relieves molders of costly storage and liability obligations.

Mold Lien  |  Mold Retention

MOLD LIEN

Issue in Brief:
Mold lien laws provide a procedure for a molder or a moldmaker to legally take possession of and sell a customer?s mold as recourse in classes of non-payment for a mold or parts produced with that mold.

Plastics Industry Interest:
The plastics industry supports mold lien legislation because it provides molders and moldmakers with a means to obtain payment without having to resort to complicated and expensive paperwork and litigation.

Further Information:
As a matter of general practice, molders and moldmakers commonly ship the fabricated products before payment is received from the customer. Some customers have demanded the return of their mold and refused payment for the manufactured products, leaving the molder without compensation or security. Because the mold is the property of the customer, in states without mold lien laws the mold/moldmaker is obligated to return it. Mold lien laws provide a means of enforcing the customer?s payment obligation for work performed. While the language of mold lien statutes varies from state to state, all typically provide the same kind of protection to molders/moldmakers and their customers.

Before enforcing such a lien, the customer must be given written notice which includes a demand for payment and state that possession of the mold will remain with the molder/moldmaker until charges are paid in full.

If, after the specified period of time, payment still has not been made, and the molder/moldmaker desires to sell the mold, the customer must be notified of that intent.

If the customer informs the molder/moldmaker in writing of his/her objections regarding the amount due, the molder/moldmaker is required to solve the problem through litigation. However, if the molder/moldmaker is not contacted by the customer, the molder/moldmaker is free to sell the mold.

MOLD RETENTION

Issue in Brief:
Mold retention laws provide a legal method for manufacturers to dispose of molds which are obsolete or have not been used for an extended period of time.

Plastics Industry Interest:
The plastics industry supports mold retention legislation because it relieves molders of costly storage and liability obligations.

Further Information:
Most custom rotational molders have a mold storage area located in their plant. Some of these stored molds are obsolete and have not been run in years. It can easily cost a substantial amount of money, per square foot per year, for this non-manufacturing storage space. In most states, a manufacturer who possesses a current or former customer?s mold also has an assumed responsibility to maintain the mold in good condition. In case of a fire, loss, or other mishap, the manufacturer is liable. State mold retention laws provide a legal method of disposing of inactive molds. While statue language may vary, most states? laws provide similar protections to molders and their customers.

The laws basically provide that, absent any binding written contract, the molder is required to hold the customer?s mold for at least three years after its last use. If at that time the molder desires to destroy the mold, the customer must be notified by registered mail at his/her last known address. The customer then has 120 days to claim possession of the mold. If the customer does not claim possession within the time allotted, the molder may destroy the mold without any liability risk.

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