The Construction Disbursement Agreement is essential for managing financial aspects of construction projects in England and Wales. It is typically used when significant funding is required for construction projects and establishes a structured framework for fund disbursement. The agreement details payment conditions, verification requirements, and compliance measures, ensuring proper fund utilization and project progress. This document is particularly crucial for protecting lenders' interests while facilitating smooth project execution through controlled fund release.
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1. Parties: Identification and details of all contracting parties
2. Background: Context of the agreement and relationship between parties
3. Definitions: Key terms used throughout the agreement
4. Disbursement Conditions: Prerequisites for releasing funds
5. Payment Mechanics: Process and timing of disbursements
6. Documentation Requirements: Required documentation for disbursement requests
7. Verification Process: Steps for verifying proper use of funds
1. Cost Overrun Provisions: Provisions for handling expenses exceeding initial budget - used for large-scale projects with significant cost uncertainty
2. Multiple Phase Provisions: Specific requirements for different project phases - used for projects with distinct construction phases
3. Security Arrangements: Additional security requirements for disbursements - used when additional financial security is required
1. Schedule of Values: Detailed breakdown of construction costs and payment milestones
2. Form of Payment Application: Standard format for requesting disbursements
3. Required Documentation List: Comprehensive list of documents required for each disbursement
4. Project Timeline: Construction schedule with key milestones
5. Authorized Signatories: List of persons authorized to request/approve disbursements
Relevant legal definitions
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