RETENTION MONEY Meaning and
Definition
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Retention money, also known as a retention bond or retention fund, refers to a specific amount of money that is withheld or withheld from payment by a client or employer during the duration of a project or contract. It is typically a certain percentage of the total contract value, often ranging from 5% to 10% of the contract sum.
The primary purpose of retention money is to act as a form of security or insurance for the client or employer against any potential defects, faults, or incomplete work that may arise as a result of the contractor's performance. It serves as an incentive for the contractor to complete the project to the required specifications and quality standards.
Retention funds are usually held by the client or employer and are released to the contractor after a specified period, often after the completion of the project or contract and the rectification of any identified issues or defects. The release of the retention money is typically dependent on the client's satisfaction with the contractor's performance and the absence of any outstanding obligations or liabilities.
Retaining some portion of the payment ensures that the contractor remains accountable for their work and encourages them to address any outstanding issues promptly. It acts as leverage to motivate the contractor to rectify any identified problems, ultimately safeguarding the client or employer's interests.
In summary, retention money is a safeguarding mechanism to ensure the satisfactory completion of a project or contract by retaining a specific percentage of the payment until all obligations are fulfilled and any defects are rectified.
Common Misspellings for RETENTION MONEY
- eetention money
- detention money
- fetention money
- tetention money
- 5etention money
- 4etention money
- rwtention money
- rstention money
- rdtention money
- rrtention money
- r4tention money
- r3tention money
- rerention money
- refention money
- regention money
- reyention money
- re6ention money
- re5ention money
- retwntion money
- retsntion money
Etymology of RETENTION MONEY
The term "retention money" is a compound noun in English, consisting of two words: "retention" and "money".
1. "Retention" comes from the Latin word "retentio", which means "holding back" or "keeping". It is derived from the verb "retinere", which means "to hold" or "to retain".
2. "Money" comes from the Middle English word "moneie", which originally referred to a specific coin, but later extended to include any form of currency or means of exchange. It ultimately derives from the Latin word "moneta", named after the Roman mint where coins were produced.
When combined, "retention money" refers to a specific practice in contracts or agreements where a certain amount of money is withheld or held back for a specific period to ensure that certain obligations or conditions are met.
