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Retainage

OhioConstruction Contract

Contract states " retainage and any reduction thereto are as follows" 8% to 50% of Labor, 8% to 50% of Material". We have been holding 10% and the last payment, retainage dropped to 8%. Does that mean at 50% completion, retainage drops to 8% for the rest of the job?

1 reply

Jan 13, 2021

This question is tough to answer without more context. Can you post the entire retainage clause? Personally, in this question's vacuum, I would argue that the clause means that the entity withholding payment of retainage (whether that is the owner or the general contractor) can only withhold 8%, and only on 50% of the total sum of the labor and materials. Stated differently, the entity withholding retainage could withhold a maximum of 4% through the project. 

Again, this answer may be incorrect or I may change it depending on what the rest of the contract states. Contracts must be read as a whole instrument in order to determine the full story of what is meant by certain clauses such as this one. 

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