ESCROW ACCOUNT-Sub contract
This query is : Resolved
30 April 2021
Suppose a contractor is getting a direct contract from govt. entity. He wants to give it on sub-contract to a third party by based on MOU between the main contractor and sub-contractor.
Whether as per MOU an escrow account can open for the main contractor and sub-contractor for the said contract. Bankers should make to payments to the sub-contractor based on the share mentioned in MOU.
Whether this mode is possible.
Note- Client is not part of this Escrow mechanism
Whether as per MOU an escrow account can open for the main contractor and sub-contractor for the said contract. Bankers should make to payments to the sub-contractor based on the share mentioned in MOU.
Whether this mode is possible.
Note- Client is not part of this Escrow mechanism
01 May 2021
Yes, this is possible if the bankers agree for such transfer.
01 May 2021
Thanks, Is it possible, if as per contract clause sub contracting is not allowed. Client is government.
01 May 2021
In such a case sub contracting is not possible.
01 May 2021
Thanks for reply. We can summarize as follows 1) If contract clause allows sub contracting, main contractor and sub contractor can open Escrow account with bank even without Approval of client. 2) If contract clause doesn't allows sub contract can't open ESCROW account even without client knowledge. Hope my understanding is correct.
01 May 2021
Yes, your understanding is right.
01 May 2021
Thanks a lot sir......
01 May 2021
You are welcome.. .....
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