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what is a joint check

Florida

Can you let me know how a joint check works? Can the main constructor get the whole check, does the check have to be share? do both parties have to sign it or only one?

1 reply

Oct 29, 2020

Joint check agreements can be etremely simple, or a bit more complex. Since there is no such thing as a "standard" joint check agreement, or a required form of a joint check agreement, they can take any shape the parties want, just like any other contract.

Usually though, they all work in a similar fashion. To put it simply, a joint check is a check made payable to two or more parties. A joint check agreement is a contractual agreement whereby one party agrees to (or gives permission to) make payment in the form of joint checks. So, for example, a joint check agreement could be entered into between a general contractor, a subcontractor and a material supplier. The supplier, being hired by the subcontractor, wants to protect itself against non-payment. All three parties agree that any payments made by the general contractor for work involving the supplier’s materials will be written jointly to the subcontractor and the material supplier. 

It's important to note, however, that the check agreement shoudl stipulate that the checks be made to party a AND party b, not OR. And, it's important to check whether the agreement is mandatory or permissive. Finally, there can be hidden dangers from using joint checks, like the "joint check rule," that parties should be aware of.  

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