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What should be in a subcontractor agreement?

On Behalf of | Jul 5, 2023 | Construction Contracts

Hiring subcontractors for construction projects is a very common practice. Contractors often need additional professionals to assist with specialized work, such as electrical or plumbing.

However, the original contract is only with the contractor, so he or she has to create an agreement for any subcontractors, and it is imperative to ensure the agreement contains all the right information.

Clearly outline the terms

An agreement needs to have a concise explanation of the work the person will do. There should be no room for questions or confusion as to what the job entails, and the subcontractor should affirm he or she is completely clear on what he or she will do for the contractor.

The terms also need to include the start and end dates of the job. It should list the location and will note what triggers the end of the agreement. For example, completing a specific duty should mark the end of the job and the agreement.

Cover payment and financials

The agreement also needs to clearly explain payment terms and conditions. The document should cover how the subcontractor will receive payment, how much it is and any potential deductions. This section should also address expenses associated with the job and declare who is responsible for paying for them.

The goal of a subcontractor agreement is to outline expectations. It must be clear and detailed. There should be no ambiguity, which could lead to issues in the future. The agreement must encompass all important details and provide a framework for the relationship between the contractor and subcontractor. Both parties must sign it.