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Joint Check Agreements Mistakes That Can Cost You Thousands

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Joint Check Agreements are very common in the construction industry...but are you taking them for granted? Do you realize just how dangerous they can be? …

Joint Check Agreements are very common in the construction industry...but are you taking them for granted? Do you realize just how dangerous they can be?

The fact is that there are a number of common joint check agreement mistakes made in the industry that can cost your company thousands. These slides are from the Webinar presentation made by zlien in its weekly Webinar series.

The presentation outlines the joint check agreement mistakes by classifying them into three broad categories: (1) Joint Check Agreement Language; (2) Fraud; and (3) The dreaded Joint Check Rule.

Enjoy, and keep your books clean and your business' cash moving by avoiding these costly mistakes.

Published in: Business

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Transcript

  • 1. Every Wednesday1pm CSTSignup At:zlien.us/z-webConstructionCredit Knowledge
  • 2. Joint Checks A Floatation Device?
  • 3. Joint Check AgreementLanguage123FraudJoint Check RuleThree Costly Mistakes
  • 4. Joint Check AgreementLanguage123FraudJoint Check RuleThree Costly Mistakes
  • 5. There is no such thingas a standard jointcheck agreement
  • 6. • Waiver of Lien RightsSecretly Embedded• The word “AND” v. “OR”in the payee field• “Allows” joint payment v.“requires” joint paymentnostandardagreement
  • 7. Download FreeDownload a freeform written to thesupplier’s advantage
  • 8. 2 Fraud
  • 9. 2• Forged signatureson the agreement• Forged checkendorsementsFraud
  • 10. 3 Joint Check Rule
  • 11. 3 Joint Check RuleYou are owed $100,000You receive a $85,000joint check from thecontractorWorkshopWhat To Do?
  • 12. 3 Joint Check RuleWorkshopWhat To Do?A. Cash the $85k, put the accountback in compliance, and continueworking or supplyingB. Cash the $85k, but stop workor furnishing until the rest is paidC. Cash the $85k and makeimmediate demand for theremaining $15kD. Do not cash the $85k check.Send it back.
  • 13. 3 Joint Check RuleWorkshopWhat To Do?A. Cash the $85k, put the accountback in compliance, and continueworking or supplyingB. Cash the $85k, but stop workor furnishing until the rest is paidC. Cash the $85k and makeimmediate demand for theremaining $15kD. Do not cash the $85k check.Send it back.
  • 14. 3 Joint Check Rule“When a subcontractor and hismaterialman are joint payees, and noagreement exists with the owner orgeneral contractor as to allocation orproceeds, the materialman byendorsing the check will be deemed tohave received the money due him.”Post Bros. Constr. Co v. Yoder, CA
  • 15. 3 Joint Check RuleYou are owed $100,000You receive a $85,000joint check from thecontractorBy signing the joint checkyou are legally signalingto the contractor that youaccept $85k as fullpaymentWorkshopWhat To Do?
  • 16. “Fairness issomething theyteach you inKindergarden.”- Judge J. Wilkerson
  • 17. • 2 Emails Per WeekFor 6 Weeks• Credit & CollectionPolicy Tips• How SuccessfulCredit ProfessionalsIncrease RevenueAnd Decrease RiskFree!http://zlien.us/6week-creditpro
  • 18. Questions?