Is Your Master Services Agreement a Prevenient Arrangement Under the Alberta Builders' Lien Act?, Focus on Construction | Infrastructure, December 2009
Date:
December 2 2009
It makes sense that businesses would like to develop long term relationships with preferred contractors and suppliers, but do master service agreements and other long term arrangements have an effect on the parties rights and obligations under the Builders' Lien Act? The answer is that if an arrangement is a prevenient arrangement then:
- the party contracting for the work or service (an owner, general contractor or anyone else) will have a significantly increased exposure for holdback; and
- the party performing the work or providing the service or goods (typically the designer, contractor or supplier or their subcontractors) should not be paid out the holdback until the end of the whole arrangement - which can seriously and negatively affect cash flow.
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