Contracts & ExecutionQuestion 536 of 690
A general contractor receives a joint check made payable to BOTH the subcontractor and its material supplier. Best practice in California is for the GC to:
a.Endorse the check and deposit it into the GC's own account first
b.Deliver the check directly to the supplier and ignore the subcontractor
c.Obtain a joint check agreement up front allocating the funds and require lien waivers from both payees before release
d.Cash the check and pay each party in proportion to the GC's discretion
Explanation
A joint check agreement protects all three parties: the GC ensures the supplier is paid (reducing lien risk), the supplier confirms receipt, and the subcontractor receives credit. Conditional lien waivers under Civil §8132 should be exchanged for the joint check before endorsement.
Law Reference: Civ. Code §8132Practice all 690 questions free — no signup required.
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