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Joint Check Agreements W/ Security, Guaranty, Trust (DR)
There is no such thing as a “standard” joint check agreement. These documents vary widely in their wording. Some joint check agreements provide a material supplier protection on a construction project. Some take away more rights than they give. A credit manager must be able to evaluate the security offered and suggest changes that will better protect company assets. The most common joint check agreements state only that a general contractor will write any check jointly. This only helps if a check is ever written and offers no protection if the customer defaults on their contract or is not owed any money. Some agreements provide no recourse against a general contractor if there is a failure to issue a joint check. Agreements can even contain a waiver of your lien and bond rights. What if the customer disappears, goes out of business or refuses to endorse a check? What if there is a disagreement about the amount owed the material supplier? What are the regulations on the use of Joint Checks on government projects for Disadvantaged Business Enterprises? Learn how to provide guaranties, actual security and trust fund provisions in a joint check agreement that will protect company assets, even in the event of bankruptcy.
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