Identify the incorrect statement regarding the security deposit and retention money of contracts.
1
Security deposit is an amount of money which shall be deposited by the contractor whose tender has been accepted in order to render himself liable to the department to pay compensation amounting to the part or whole of his security deposit.
2
Retention money is a compulsory clause of the condition of contract.
3
Whenever any claims for payment of a sum of money arises out of or under the conrtact against the contractor, the Engineer-in-charge is entitled to withhold and also lien to retain such sums in whole or in part from the security till finalisation or adjustment of any such claim.
4
In order to afford relief to the contractor a percentage (normally 50%) of the security money is refunded for the portion of the work which has been completed and whose maintenance period is over.