What determines whether the payer must or can make common cheques? The joint cheque agreement, of course. Where does this concept of “joint check” come from? Is there a federal or national law that gives contractors, owners and suppliers a directive on the operation of these agreements? Are there any regulatory restrictions on what can be agreed as part of a pooled cheque agreement? As a general rule, general contractors or promoters do not want to create an additional obligation through a joint audit agreement. We always request a joint audit agreement in our markets with Hawaiian contractors. Usually we have a general, sub-supplier (our company) and have a JCA between 3 of us. If we only work under the general, we can always have a JCA and that. On the contrary, joint cheque agreements are a creature of the treaty. In the United States, all parties have the general freedom to enter into contracts for whatever they want. The law only marginally restricts this freedom in order to prohibit people from violating public order (i.e. going into slavery, murder, or “no instructions”). In the absence of a joint audit agreement, the main contractor pays the subcontractor for the work at the end of the work. The subcontractor turns around and pays the supplier for the supplies of building materials that participated in the work. Ideally, all parties are paid, but of course, there are inefficiencies and risks that interrupt the smooth debacle of construction payments.
Subcontractors who need cash can get their hands on a joint check and falsify the other party`s signature to deposit it themselves. You may have good intentions to pay yourself, but you may be overlooked due to cash flow issues. If they sign an agreement with a subcontractor or subordinate supplier and undertake to establish a common verification for all work at this lower level, a rather uncomfortable obligation arises. There are several reasons why a payer wants to avoid such an obligation: it means that there is no standard agreement for common checks. Writing a guide on the application of a pooled check agreement is a difficult topic, as these agreements are a contractual creation and vary greatly from agreement to agreement. As a result, what may be appropriate for one agreement cannot suit another. It is therefore advisable that you consult here, as a first step, a lawyer in charge of construction. .