Common control agreements can be used in any sector. But these tools are much more used in construction than elsewhere. Another situation may arise if the payer issues the cheque without your company in violation of a joint audit agreement. This may happen accidentally or intentionally. Nevertheless, this is a violation of the Common Control Agreement, and if the parties do not cooperate to resolve the issue, the paying party may hesitate to write you another cheque and pay for the work or equipment twice. To simplify, a common control is a two- or more-party control. A joint audit agreement is a contractual agreement whereby a party accepts payment in the form of a common control (or authorizes the whole). An example of a joint audit agreement of the construction industry would be for the prime contractor or general contractor to agree to conduct a joint review of the subcontractor`s first-class subcontractor and the subcontractor`s equipment supplier. Joint audit agreements primarily benefit the lowest historical part (such as a supplier of building materials). The party making the first payment – usually the general contractor or the landowner – easily benefits from these agreements, but the advantage fades from the benefit granted by the party who received the payment. Subcontractors and others with credit problems are known to get the signature of a general contractor or developer for a joint audit agreement. You have to understand that this is happening in the industry and it is a good practice to send an email or call the general contractor or developer to confirm that they have actually signed the joint audit agreement and understand their commitments. Typically, a joint audit agreement is reached between a general contractor, a subcontractor and a hardware supplier.

The supplier hired by the subcontractor wants to protect against non-payment. All three parties agree that all payments made by the general contractor for work on the supplier`s equipment will be charged jointly to the subcontractor and the equipment supplier. The gene entrepreneur I have worked successfully for 5 previous jobs does not pay me. There is no work-related problem. I have entered into a verbal agreement to provide manufacturing tools in a church building. Now I have finished the work for a consensual agreement of $2,300.00. That`s right. Consider this scenario. They have $100,000 for materials that were delivered to a subcontractor more than two months ago.

The account has been identified as a high risk, all establishments have been frozen and you have begun to prepare a collection plan that may include filing a loan application or a mechanical pledge fee. The general contractor sends you a cheque for $85,000, which has been written to you, as well as to the subcontractor. You could really use that money. It is possible that the parties will focus closely on the obligations of the Common Control Agreement. Unfortunately, any other argument will be taken under the sun (work conflicts, delays, damages, violations, etc.). If you want to impose your common control agreement, don`t be naïve about these other disputes. Keep everything in mind and come up with your great legal plan of the picture. Let`s start with a few reasons why you may be placed in a position where a common audit agreement might have to be imposed. Here are some common scenarios: the common audit rule means that whenever a general owner or contractor makes a joint cheque to a subcontractor and the subcontractor`s equipment supplier, the equipment supplier that supports and files the joint review certifies that all amounts earned up to the time of joint check have been paid to the subcontractor. A formal dispute resolution clause allows contractors, subcontractors and suppliers to avoid litigation. What dictates whether the paid party has to perform common checks or only? The common control agreement, of course.