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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Wednesday, July 14, 2021

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will advise construction counsel on best practices when drafting and enforcing a joint check agreement. The panel will discuss the issues regarding written consent and agreement of all parties and what constitutes valid consideration, particularly when a dispute arises with a supplier. The panel will address contractor liability under these agreements and how joint check agreements impact supplier payment and lien rights.

Faculty

John McNamara
Founding Partner
Lane McNamara, LLP

Mr. McNamara’s practice areas include construction law, employment law, suretyship, trial practice and insurance defense. He has tried numerous cases in state and federal courts before juries and judges and has argued before the Supreme Judicial Court of Massachusetts, the Appeals Court of Massachusetts, and the United States Courts of Appeal. The Martindale-Hubbell National Law Directory has awarded Mr. McNamara an AV Rating, the highest rating for legal ability and professional ethics. He has also been named a New England Super Lawyer by Law & Politics and Boston Magazine; this designation is limited to the top 5% of attorneys in New England. Mr. McNamara has been an invited speaker at the Construction Industries in Massachusetts, Associated Builders and Contractors of Massachusetts, Massachusetts Electrical Contractors Association, and Massachusetts Continuing Legal Education.

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Kelly Davis
Principal
Kelly M. Davis & Associates, LLC

Ms. Davis brings more than 20 years of experience, determination, compassion, and innovation to her practice. She represents clients from all segments of the construction industry in all types of construction disputes, including delay and labor impact claims, defective work claims, performance and payment bond, breach of contract, breach of warranty, and mechanic’s and materialman’s lien foreclosure claims. Ms. Davis also assists her clients by handling corporate formation and other corporate issues, reviewing and drafting contracts for their businesses, and perfecting lien and bond rights. She is a frequent speaker to professionals on construction law topics.

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Description

Joint check agreements and issuing joint checks are well established in the construction industry. They are typically used to get downstream subcontractors and suppliers paid as soon as the upstream subcontractors are paid. Typically, a joint check arrangement involves an agreement between the prime contractor and its first-tier subcontractor where the parties agree that the prime contractor will issue all or part of a progress payment as a joint check or as a series of individual joint checks payable to the subcontractor and one of the subcontractor's material suppliers or lower-tier subcontractors as co-payees.

Counsel must ensure there is a signed joint check agreement between or among the relevant parties. A contractor cannot unilaterally institute a joint check requirement. If a contractor issues a joint check without an agreement with the subcontractor, the check will not satisfy the contractor's payment obligations and may breach the subcontract.

Well drafted joint check agreements should consider and address the unique needs and concerns of the project participants. The contractor potentially undertakes an independent payment obligation to the material supplier with whom the contractor has no direct contractual relationship.

Contractors can knowingly or unknowingly assume a direct obligation to the supplier if the agreement can be read as creating such a direct obligation. The parties' intent demonstrated in the contract governs a direct payment obligation to the supplier in a joint check agreement.

Joint check agreements can also impact the supplier's payment and lien rights. Under a rule applied in some jurisdictions known as "the joint check rule," when a subcontractor and a material supplier are joint payees, and no agreement exists with the contractor as to the allocation of the joint check proceeds, the supplier by endorsing the joint check is deemed to have received the money due.

Listen as our authoritative panel discusses the advantages and disadvantages of utilizing a joint check agreement in a construction project. The panel will discuss the ways such an agreement may affect a general contractor's liability and a supplier's payment and lien rights.

Outline

  1. Joint check agreements
    1. Advantages
    2. Disadvantages
  2. Contractor liability
  3. Supplier
    1. Payment rights
    2. Lien rights
  4. Best practices and provisions

Benefits

The panel will review these and other relevant topics:

  • What are the advantages and disadvantages of using a joint check agreement?
  • How can a joint check agreement increase a contractor's liability to a supplier?
  • How does a joint check agreement affect a supplier's payment and lien rights?
  • What are best practices for drafting a joint check agreement for a construction project?