For those lower tiered subcontractors and suppliers who attempt to bolster their financial security on a construction project when their contracting party runs into financial trouble, a joint check agreement (JCA) may not be the answer. In the Truland case, the courts held that, even though the general contractor issued the check payable jointly to the subcontractor and its supplier under a joint check agreement that required the subcontractor to endorse the check and return it to the general contractor for delivery to, and collection by, the supplier, the process resulted in the transfer of property of the subcontractor for purposes of preference law.
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