Question

Prior to commencement of work the contractor may request in writing legal evidence that the owner has made financial arrangements necessary to fulfill the owner's obligations under the contract. After commencement of work what circumstances must apply before the contractor can request this information again?

Answer 1

A contractor can request financial verification from the owner before starting work and may do so again after commencement under certain conditions, including payment issues or changes in the project's scope.

Step-by-step explanation:

In the context of a construction contract, a contractor can initially request written evidence from the owner demonstrating financial arrangements to fulfill obligations under the contract before commencement of work. This provides assurance to the contractor that the owner has the ability to pay for the work that will be performed. After the work has commenced, the contractor may request this information again under certain circumstances, although the specific conditions under which this is permissible are not typically defined without a full contract present. These could include observed delays in payment, amendments to the scope of the project that significantly impact the cost, or signs that the owner's financial situation may have changed. It is similar to a bank requiring financial information and performing credit checks before issuing a loan, requiring a cosigner, or collateral to protect their investment.