Subcontractor Agreement

Jump to Section

Need help with a Subcontractor Agreement?

CREATE A FREE PROJECT POSTING
Post Project Now

What is a Subcontractor Agreement?

A subcontractor agreement is a legal document that a general contractor uses on a construction project to hire a subcontractor. This contract is a legally binding agreement that defines the terms of a smaller job within the main project to be completed by an entity that is not the GC. Subcontractor agreements are typically between the contractor and another company and does not involve the client.

How Subcontractor Agreements Work

Subcontractor agreements are contracts between a general contractor and a sub-contractor that define the terms of the agreement to complete a smaller project within a main construction project. These agreements are separate from the main construction contract , which is signed between a general contractor and their client.

When a general contractor takes on a construction project, they don’t always have the knowledge, licensure, or insurance to complete all aspects of the whole project. When this happens, they can hire a sub-contractor to complete certain parts of the job. A contractor that specializes in framing buildings, for example, might hire a subcontractor who focuses on wiring the electric panels of the building.

Subcontractor agreements allow general contractors to ensure that each aspect of a construction project is handled by an expert in the trade. By using subcontractor agreements to take advantage of the expertise of other companies, construction projects can be completed up to state requirements while ensuring the client has the best work available completed on their construction project.

Check out this article to learn more about how sub-contractor agreements work.

What to Include In a Subcontractor Agreement

Making sure that all major details of a subcontracted job is included in the subcontractor agreement is vital to protecting the parties to the contract. There are many aspects of a successful subcontractor agreement that aim to make the subcontractor and general contractor relationship as simple as possible.

Here is an overview of what subcontractor agreements cover:

  • Subcontractor, Contractor, and Client Details: The first thing that any subcontract agreement should call out is the parties of the construction contract. This should include names and contact details for each party.
  • Payment Terms: Subcontractors take on a construction job for one main reason: to get paid. The subcontract agreement should specify how much a subcontractor will be paid and how often.
  • Scope of Work: A statement of work regarding what is being contracted, how long the project will take, and any other expectations of the GC or client should be included here. There should also be information on what to do in the event of a change in the scope of work, such as a change order .
  • Change Orders: Unexpected circumstances occur on construction projects without warning. When something doesn’t go as planned, there must be a procedure to use to identify changes that need to be made, get them approved, and modify the original agreement. A change order clause accomplishes all of the above.
  • Insurance and Licensure: Subcontractors must be fully insured and licensed in their field in order to legally contribute to a construction job. Any applicable insurance and licensure details should be included and confirmed in the subcontractor agreement.
  • Dispute Resolution: When things go wrong, legal disputes can arise. Specific information about what can be done in the event of a conflict is a vital part of a subcontractor agreement. This should include a dispute resolution clause , an arbitration clause , and an indemnification clause , if applicable.
  • Termination Details: This section of a subcontractor agreements should detail what scenarios warrant a termination of the subcontractor. Some grounds for termination might involve behavior, ability to meet project deadlines, or willingness to complete required duties. Termination clauses give information about any notice that might be required and how a termination might change the payment terms of a contract.

Here is an article about the most important aspects of a successful subcontractor agreement.

Meet some lawyers on our platform

Donya G.

31 projects on CC
View Profile

Ashley H.

19 projects on CC
View Profile

Mark D.

11 projects on CC
View Profile

Jeremiah C.

9 projects on CC
View Profile

Who Needs a Subcontractor Agreement

Subcontractor agreements are valuable tools for any general contractor to have. This is because a subcontractor agreement allows a subcontractor to take advantage of the expertise, licensure, and insurance of skilled workers that are not employed by the GC.

These agreements pave the way for a general contractor and another company to work together towards the same common goal of completing a construction project.

When is a Subcontractor Agreement Needed?

A subcontractor agreement is needed any time a second company is brought in to complete a project within the original scope of work on an originating construction contract. When a general contractor makes an agreement to have someone else complete a part of the job they contracted with the customer, in other words, a subcontract agreement is required.

Who Benefits from Subcontractor Agreements?

Subcontractor agreements are ideal for general contractors and subcontractors because they provide protections for both parties. General contractors set the terms of the agreement, detailing payment terms, project expectations and timelines. Subcontractors must abide by the rules in the agreement, or risk being terminated.

On the other hand, subcontractors also gain protection from these agreements. If payment is withheld, the subcontractor agreement allows for legal recourse to be pursued. Also, if an unexpected change needs to be made to the original scope of work, a change order clause in the subcontractor agreement can allow for changes and gives a specific workflow to follow to get the change documented and approved.

Learn more about who needs a subcontractor agreement by checking out this article .

How to Write a Subcontractor Agreement

Subcontractor agreements exist to create a contractual relationship between a subcontractor and a general contractor on a construction project. Subcontractor agreements explain the roles and duties of both parties as well as defines each party’s obligations while the work is being completed.

Writing a subcontractor agreement is a job best left up to construction lawyers , but can be broken down into an easy step-by-step process.

Step One: Define the Scope of Work

Before a subcontractor agreement can be drafted, the scope of work must be defined. Decide what work the subcontractor should complete and document it.

Step Two: Create Project Timeline

Make sure your project timeline answers the following questions:

  • How quickly does the project need to be complete?
  • Are there any major milestones that need to be done by a certain time within the scope of work?
  • When is the deadline for completion of the entire project?

ContractsCounsel Subcontractor Agreement Image

Image via Pexels by Pixabay

Step Three: Explore Payment Terms

The subcontractor and GC must agree on compensation, compensation schedule, and method of compensation. This info must then be written into the subcontractor agreement

Step Four: Outline Legal Considerations

In order to protect both parties from a legal standpoint, contractors may want to consider including the following clauses in their subcontractor agreement:

  • Arbitration clause
  • Change order clause
  • Indemnification clause
  • Termination clause
  • Subordination clause

Check out this webpage to see a sample template of a subcontractor agreement.

Getting Help with a Subcontractor Agreement

Do you want to set up a subcontractor agreement that can help your company work together with other experts in the construction industry? You need the help of experienced construction lawyers to get the job done right. Post a project on ContractsCounsel today to get connected with construction lawyers who are experts in drafting subcontractor agreements for construction projects.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Subcontractor Agreement Lawyers

ContractsCounsel verified
Managing Partner
11 years practicing
Free Consultation

I run a small law firm in Pasadena, CA. I have been practicing for almost 10 years and the other attorneys at my firm each have 12+ years of experience. We focus on business and employment law, protecting and defending business owners. While my clients are all sizes, I particularly enjoy helping smaller companies and individuals manage their legal needs without the high price tag.

ContractsCounsel verified
Principal
40 years practicing
Free Consultation

I have over 25 years' experience representing individual and company clients, large and small, in transactions such as mergers and acquisitions, private offerings of securities, commercial loans and commercial endeavors (supply contracts, manufacturing agreements, joint ventures, intellectual property licenses, etc.). My particular specialty is in complex and novel drafting.

ContractsCounsel verified
Litigation Attorney
5 years practicing
Free Consultation

I assist individuals and businesses across the state of Florida with contract drafting, contract interpretation, and issues that may arise because of contract terms, including demands (cease-and-desist letters) and litigation. I have experience with general service contracts, non-compete agreements, settlement agreements, and many other contracts. Please reach out if I can help you with a contract-related project!

ContractsCounsel verified
Attorney
5 years practicing
Free Consultation

Brianna is a well-respected attorney with a juris doctorate degree in law from Touro College Jacob D. Fuchsberg Law School and bachelor’s degree in Business Administration and Management from Dowling College. Since becoming an attorney, she has practiced in various areas including business law, real estate, employment law, estate planning, and more. Brianna has very broad and extensive business experience; She is an entrepreneur and co-owner of a manufacturing company that was built by her and her partner, where she also served as the Chief Legal Officer/General Counsel and Human Resource Manager for the company. She has been involved in business for over 15 years, thus she offers a very unique skillset to her clients; not only does she understand contractual principals and obligations from a legal perspective while drafting and negotiating agreements, but she also has the foresight and ability to ensure the agreement reflects the practical aspects of the business. Based on the client’s needs and desired outcome, she has the forethought to cover different angles that would be overlooked from a legal standpoint but be of consequence in business. She conducts risk assessments and minimizes client’s risk and exposure to potential liability. Additionally, she specializes in drafting and negotiating agreements. Negotiating is a passion of hers; in law school, she was a member of the Alternative Dispute Resolution Society and won the intraschool negotiation competition. Brianna believes in quality over quantity. She treats every client as a top priority; thus she will not take on many cases at a time because she wants to give each client the focus and attention they deserve. She has sharp attention to detail and is a forceful advocate for every client.

ContractsCounsel verified
Outside General Counsel / Business Attorney
34 years practicing
Free Consultation

Experienced and broad based corporate/business attorney and Outside General Counsel (OGC), for start-ups, small businesses and growing companies of all sizes, advising and assisting clients with corporate and LLC formation, contracts and agreements, internet and terms of use/service agreements, trademarks and intellectual property protection, the purchase and sale of businesses (M&A), labor and employment matters, compliance and risk management, corporate governance, and commercial leasing matters. See other reviews on my website at www.ogcservices.net/reviews

ContractsCounsel verified
Attorney and Counselor at Law
22 years practicing
Free Consultation

Experienced attorney focusing on estate planning, probate administration, business formation and counseling, and consumer bankruptcy.

ContractsCounsel verified
CEO
35 years practicing
Free Consultation

I focus my practice on startups and small to mid-size businesses, because they have unique needs that mid-size and large law firms aren't well-equipped to service. In addition to practicing law, I have started and run other businesses, and have an MBA in marketing from Indiana University. I combine my business experience with my legal expertise, to provide practical advice to my clients. I am licensed in Ohio and California, and I leverage the latest in technology to provide top quality legal services to a nationwide client-base. This enables me to serve my clients in a cost-effective manner that doesn't skimp on personal service.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call