Holdback

In development contracts and projects it is common for the customer to be allowed to retain a proportion of the contract price, ranging from 3-15 percent for a period of time after effective completion, which is paid upon a specified condition being achieved, e.g.:

  • no observed and un-repaired or un-rectified faults after ninety days;
  • no observed faults during fifteen continuous days of operation; or
  • certification and acceptance of the project product by a third party (for example a prime contractor).

See Stage Payment.

Related Terms

Term posted by Origin on in