California Joint Check Agreement

Posted in Uncategorized by Hemant Naidu on September 13, 2021

A recent case from California, Josefowicz v. Allstate, has sent common checks in California and can deposit them. You can Jozefowicz v. Allstate Ins. Read here, courtesy of Justia. Haight Brown & Bonesteel also has an excellent breakdown of the case. In this case, Sunny Hill Restoration was able to be paid, even though the owner refused to pay it. It was important that the contractor had the right to deposit the cheque himself. Now, the insurer was still making cheques directly to the owner, and then the landlord was responsible for forwarding the cheque to his contractor Sunny Hill. However, as this clause allowed Sunny Hill to deposit cheques without the owner`s assistance, the contractor was able to contact the Allstate insurer directly to resolve the issue. Let`s start with a few reasons why you may be placed in a position where a pooled check agreement might need to be enforced.

Here are some common scenarios: A general contractor also has the opportunity to obtain additional protection by having a supplier waive various rights. Most importantly, many general contractors are incentiving reckless suppliers to give up mechanics` deposit and engagement rights in exchange for the pooled cheque agreement. A supplier may also accept a “Pay if Paid” provision that removes any obligation of the general contractor if payment is never received by the owner. A general contractor may also say that the agreement does not create contractual rights with the creditor and that it is only a “comfort” or “housing” for the creditor`s supplier. All these provisions are set out in the third form set out in the Annex. A joint audit agreement protects the equipment supplier from the risk that the subcontractor will not pay it even after the subcontract has been received. The general contractor is protected against the risk that the supplier will not be paid and deposits a mechanical pledge right. 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. Joint checks can be traps for the unwary. If you are a general owner or contractor, issuing a joint review can be an effective method of ensuring that a supplier is paid. . . .