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2021 Tennessee Code
Title 66 - Property
Chapter 34 - Prompt Pay Act
Part 2 - Owner/prime Contractor Payment
§ 66-34-205. Sums Intended as Payment to Be Held in Trust
Universal Citation:
TN Code § 66-34-205 (2021)
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This media-neutral citation is based
on the American Association of Law Libraries Universal Citation Guide and is not
necessarily the official citation.
- Any sums allocated by the owner or provided or committed to the owner by a third party that are intended to be used as payment for improvements made to real property by virtue of a written contract between the owner and the prime contractor must be held by the owner or third party in trust for the benefit and use of the prime contractor and its remote contractors, and are subject to all legal and equitable remedies.
- The presence of an otherwise valid agreement to arbitrate does not prevent a prime contractor or remote contractor from seeking equitable relief, including injunctive relief, as permitted by § 66-34-602 against any owner, prime contractor, or remote contractor.
- The bankruptcy or insolvency of any party is not a valid defense for the failure of an owner or other third party that controls or holds those sums described in subsection (a), as well as all retainage, to release those sums when they are otherwise due.
- This section does not apply to the state, including its departments, boards, or commissions, or to any institution of higher education.
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