Contingency Agreement Sample For Construction In Hillsborough
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The purpose of retention — also known as retainage — is to incentivize contractors to complete a job ing to the contract terms by withholding a portion of their payment until all agreed-upon project milestones have been met. It's like a risk management strategy to ensure job completion.
Retention in construction is a financial security usually held by the principal against the head contractor and by the head contractor against subcontractors.
Retention is security held by a procuring contractor to guarantee the performance of a suppling contractor and in particular to safeguard against defects in the event that the supplying contractor fails to satisfactorily rectify them.
Retainage is the withholding of a portion of the final payment for a defined period to assure a contractor or subcontractor has finished a construction project completely and correctly.
A Simple Example of Fixed-rate Retainage To calculate your expected holdback, simply multiply the scheduled payment amount by the retainage rate. In this case, a $30,000 payment x 10% retainage would equal $3,000 in holdback for each payment.
Retainage usually depends on substantial completion Most contracts base the deadline for retainage payments on the date of a project's substantial completion.
