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Subcontract Retainage Not Due Until Project Acceptance Payment-final; Retainage

Tuesday, February 03, 2004 11:57 am

 
Subcontract Retainage Not Due Until Project Acceptance Payment-final; Retainage

An Arizona court has ruled that retainage under a subcontract did not have to be released until the owner accepted the project. And the claim limitation period on the subcontractor's performance bond did not start to run until release of the retainage.

Decca Design Build, Inc. was the prime contractor on an apartment building project. Decca subcontracted the plumbing work to Precision Mechanical, Inc. Precision furnished a performance bond, issued by American Automobile Insurance Co., naming Decca as the obligee.

The bond said, "Any suit under this bond [...]

 
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