What does Fund Control Agreement mean? Read on to discover the definition & meaning of the term Fund Control Agreement - to help you better understand the language used in insurance policies.
Fund Control Agreement
An arrangement employing an independent third party to disburse the construction funds to the various trade contractors and suppliers on a given project, often mistakenly believed to be a viable alternative guarantee to a contract bond. Marshaling the contract funds and disbursing them pursuant to approved payment requests mitigates the possibility of a payment bond type claim. It does not, however, guarantee that the project will be built per plans, on time, within budget, and that all bills will be paid.
We hope the you have a better understanding of the meaning of Fund Control Agreement.