by ElfLocks » Sun Dec 08, 2013 9:21 pm
This is how the commentary explains it "This section gives subcontractors and suppliers a preference in the event of the contractor’s bankruptcy and thereby protects the owner from lien claims which could have been asserted by those entities had they not been furnished with this preference. As the recipient of trust funds, the contractor is under an obligation to properly apply the funds for the account of the subcontractors and suppliers.Absent the express provision, the contractor would not be able to co-mingle monies received for the benefit of subcontractors or suppliers with the contractor’s own funds. Such a result would create accounting and bookkeeping complexities unnecessary to the accomplishment of the purpose of this provision."