Progress Draws Clause Samples
The Progress Draws clause establishes a mechanism for the contractor or service provider to receive partial payments as work on a project advances. Typically, these payments are made at predetermined milestones or upon completion of specific portions of the work, subject to verification or approval by the client or an independent certifier. This clause ensures that the contractor maintains cash flow throughout the project, reducing financial strain and incentivizing timely progress, while also providing the client with a structured way to monitor and control payments based on actual work completed.
Progress Draws. Subject to and in accordance with the terms and conditions of this Agreement, the funding to be provided by the Municipality shall be paid to the Town over time, in accordance with the following schedule:
(a) Thirty Percent (30%) of the funding shall be paid to the Town upon the Town providing the Municipality with the executed funding agreements with the Federal and Provincial Governments as well as any executed project management contracts with a professional engineering firm hired to manage the Project (the engineers and engineering firm managing the Project over the life of the Project as applicable from time to time hereinafter referred to as the “Project Manager”);
(b) Twenty Five Percent (25%) of the funding shall be paid upon confirmation from the Project Manager that the Project has reached Fifty Percent (50%) completion;
(c) Twenty Five Percent (25%) of the funding shall be paid upon confirmation from the Project Manager that the Project has reached Seventy Five Percent (75%) completion; and
(d) The remaining Twenty Percent (20%) shall be paid to the Town’s solicitor in trust upon confirmation from the Project Manager that the Project has reached final completion and receipt by the Municipality’s solicitor of an undertaking from the Town’s solicitor to hold such monies in trust pending the expiry of the applicable Builders’ Lien Act period and confirmation that there are no liens filed pursuant to the Act following such expiry.
(e) In the event the Municipality should fail to make payments required under this agreement, and in the event the failure continues for a period more than 30 days, interest shall accumulate and is payable on the unpaid portion of the payment at a rate equal to the Town’s cost of borrowing plus 2% per annum.