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Joint Check Agreements and Unconditional Waivers

We have a joint check agreement in place. Payment has been made to Subcontractor and Supplier. What amount does the Subcontractor list on the Unconditional Waiver and Release on Progress Payment? Full amount of payment requested or amount received after Suppliers joint check has been issued?

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Mar 1, 2021

For a joint check arrangement, the check which includes payment to the supplier should be just for the amount owed to the supplier. A second check should be made out to the subcontractor for the surplus that may be owed to the subcontractor. So, two checks. Good luck.

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Mar 1, 2021

For Joint checks, we require both a Conditional and Unconditional waiver from the Subcontractor and their Suppliers. The check for the Supplier has both the Sub and Supplier name listed as the “Pay To”. I know what amounts the suppliers should put on their waivers, but I’m confused about the Subcontractor’s waivers. Example: Subcontractor submits an Application for Payment for $50,000, with a Conditional Waiver. We usually accept a waiver with the full $50,000 listed as the payable amount, since we may not receive the Supplier invoices at the same time. The Sub’s Supplier submits unpaid invoices for $10,000, with a Conditional Waiver for $10,000. Two checks are created, one for $40,000 for the Sub, and one for $10,000 for the supplier. Once payment is received by the sub and supplier, they must send an Unconditional Waiver. Does the sub list $40,000 or $50,000 as the paid amount on the Unconditional Waiver? Hope this is a little better explanation. Thank you.

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Mar 1, 2021

The subcontractor should acknowledge payment for the full amount, as the full amount would be deducted from its subcontract balance.

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