Contract documents

October 31, 2022

Occasionally, an owner will issue a “joint check” on a project when paying a contractor. A joint check is when the owner makes a check payable to both the contractor and a subcontractor.

Why Are Joint Checks Issued?

If the architect withholds payment certification because the contractor hasn’t paid the subcontractor for work properly performed, then owners can issue joint checks to make sure that a particular subcontractor gets paid. Joint checks include both the contractor and subcontractor as payees, such that both of their signatures are required to cash the check. Usually, the owner will issue a joint check if they think that the subcontractor will file a mechanic’s lien, lawsuit, and/or a payment bond claim if they aren’t paid, and they want to avoid going down that path.

What Are the Risks in Issuing Joint Checks?

Often, parties will engage legal counsel to carefully draft “Joint Check Agreements” to make sure that they do not take on additional liability by issuing the joint check or lose rights by accepting the joint check.

Do AIA Contracts Include Provisions on Joint Checks?

Yes. For example, Section 9.5.4 of A201-2017 provides that “…the Owner may, at its sole option, issue joint checks to the Contractor and to any Subcontractor or supplier to whom the Contractor failed to make payment for Work properly performed or material or equipment suitably delivered.” If the owner issues a joint check, then the contractor and architect are typically required to account for that payment on subsequent payment applications.

AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.