The Joint Check form is a legal document that establishes a payment agreement among three parties involved in a construction project. This form ensures that a subcontractor or supplier receives payment directly from the general contractor or owner, providing a layer of security for those supplying materials or labor. By signing this agreement, all parties commit to a clear understanding of their financial responsibilities, helping to prevent disputes over payment.
The Joint Check form serves as a crucial tool in the construction and contracting industries, facilitating payment processes among multiple parties involved in a project. This agreement typically involves three main parties: the paying party, often the project owner or prime contractor, the subcontractor responsible for executing work, and the supplier providing materials or labor. The essence of the Joint Check Agreement lies in its ability to ensure that the supplier receives timely payment directly from the prime contractor or owner, which can help mitigate the risk of non-payment. By establishing a joint check payment system, the parties agree that invoices submitted by the supplier will be paid via checks issued jointly to both the subcontractor and the supplier. This arrangement not only fosters trust among the parties but also protects the supplier's interests by ensuring that funds are allocated for their services. Additionally, the agreement outlines responsibilities, including the duty of the subcontractor to endorse checks and the obligation of the prime contractor to notify the supplier of any insufficient funds. Importantly, this form does not create any liability for the supplier regarding the performance of the subcontractor or the prime contractor, while still preserving the supplier's rights under applicable laws. Understanding the nuances of the Joint Check form is essential for all parties involved, as it can significantly impact the financial dynamics of construction projects.
When filling out the Joint Check form, it's important to be thorough and accurate. Here are some things you should and shouldn't do:
Here are four common misconceptions about the Joint Check form:
This is not true. Joint checks can be used for any project where multiple parties are involved, regardless of the project's size. They serve to protect all parties by ensuring that payments are made directly to suppliers or subcontractors.
In fact, the supplier (Party C) has rights to the payments made through the joint check. The agreement ensures that the supplier is compensated for their materials or labor, protecting their interests in the transaction.
While it is ideal for all parties to sign at the same time, the agreement can be executed in counterparts. This means that each party can sign separately, and the agreement will still be valid as long as all parties have signed.
This is a misconception. While the agreement is binding, it can be revoked with the written consent of all parties involved. Clear communication is essential to make any changes to the agreement.
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Joint Check Agreement
The Parties To This Agreement Are:
This Agreement Relates to the following
Project(s):
__________________________
The Prime / Owner
Party A - The Paying Party
The Prime / Subcontractor
Party B
The Supplier / Subcontractor
Party C
The Parties to this agreement are above-provided and are labeled as Party A, Party B and Party C.
Provided that this agreement is executed by all parties hereto, Party C and Party B have a contractual agreement whereby Party C will supply materials and/or labor to Party B at or for the above-identified Project(s). Party B has requested Party C to extend credit for these purposes. In consideration of the benefit to the above Party A and Party B by Party C furnishing its materials and/or labor to the above-referenced Project(s), Party A and Party B hereby agree and guarantee that Party C’s invoices for the above- referenced Project(s) shall be paid in accordance with this Agreement by joint check to be sent directly to Party C at its above listed address.
Party B agrees that such joint check payment shall be applied against Party B’s contract price with Party A. Party A and Party B agree that Party C’s invoices shall be paid out of the first monies Party B is entitled to out of any of Party B’s payments as to which Party C’s invoices are a component part and out of any other of Party B’s furnishings to Party A on the above-listed Project(s) or any other project to the extent that any of the monies owed to Party C on the above-listed Project(s) are overdue. As an inducement to Party C’s continued supplying to Party B with materials and/or labor for the above-listed
© Express Lien, Inc. dba Zlein 2012
Project(s), Party A herein agrees that if, at any time, there is insufficient monies left in Party B’s account to honor Party C’s invoices as submitted, Party A will so notify Party C in writing of such fact within ten (10) days of becoming reasonably aware of the same. Party C will rely on the absence of any such notification(s) as evidence that there are sufficient monies in Subcontractor's account for the above-listed Project(s) to honor Party C’s past and future invoices.
Party B has an affirmative duty to endorse any joint checks in favor of Party C paid under this Agreement upon receipt or presentation, as the case may be. Further, Parties A and B are prohibited from revoking this Joint Check Agreement without the written consent of Party C. Party B’s inclusion on any joint checks written in accordance with this Agreement is merely placing Party B in a position of holding the joint check in trust for the benefit of Party C, and Party B is a mere conduit for the payment due to Party C.
Nothing contained herein shall be construed to make Party C a party to, or in any way responsible for, any performance by either Party A or Party B that may be required under the terms of the contract between Party A and Party B, nor shall anything herein contained be construed to obligate Party C to extend future credit or furnish any materials and/or labor to any project whatsoever. Further, nothing herein contained shall be deemed to be a waiver of any rights of Party C to avail itself of any right or remedies that may be afforded to Party C under the provisions of the Uniform Commercial Code or mechanics lien laws, or the waiver of any rights whatsoever, this Agreement being in addition to any other legal rights available to Party C.
In the event of a default in payment of any amounts called for under this Agreement, Party A and Party B agree jointly and severally to pay Party C reasonable attorney’s fees and costs incurred by Party C in the enforcement of this Agreement. Party A and Party B acknowledge that this Agreement is entered into for valuable consideration and that each is specifically benefited by Party C’s furnishing of materials and/or labor to the above-listed Project(s). Further, the Parties agree that this agreement shall be deemed effective when signed by all three parties hereto, and shall be binding upon the parties hereto, on any related companies to the parties hereto, and on each’s successors and assigns. This Agreement may be executed in counterparts, and any provision or terminology deemed invalid is separable from the whole.
Signed:
_____________________
Party A
By: __________________
Title: _________________
Date: ___/___/_____
Construction Contract: A construction contract outlines the terms and conditions between the owner and the contractor. Like the Joint Check Agreement, it establishes responsibilities and payment obligations, ensuring that all parties understand their roles in the project.
Subcontractor Agreement: This document defines the relationship between a contractor and a subcontractor. Similar to the Joint Check Agreement, it specifies the scope of work and payment terms, ensuring that subcontractors are compensated for their contributions to a project.
Purchase Order: A purchase order is a document that confirms a buyer's intent to purchase goods or services. It is akin to the Joint Check Agreement in that both documents establish payment terms and the expectations for the delivery of materials or services.
Waiver of Lien: A waiver of lien is a legal document that relinquishes a party's right to file a lien against a property. This document is similar to the Joint Check Agreement in that both are used to ensure that payments are made and that all parties are protected in financial transactions.
Letter of Credit: A letter of credit is a financial document issued by a bank guaranteeing payment to a seller. Like the Joint Check Agreement, it serves to secure payment and provides assurance to the supplier that they will be compensated for their goods or services.
Joint Venture Agreement: This agreement involves two or more parties collaborating on a project. Similar to the Joint Check Agreement, it outlines the financial responsibilities and profit-sharing arrangements among the parties involved.
Credit Application: A credit application is a request for credit from a supplier. This document is akin to the Joint Check Agreement in that it establishes the terms under which credit will be extended, protecting both the supplier and the buyer.