Construction Subcontractor Agreement Advice for Business
When you run a business, there may be times when you need to hire a subcontractor to help with part of your work. In construction, this is extremely common. Before hiring a construction subcontractor, you will want a protective contract in place. This guide will help you know what you should and should not include in that contract.Download Template
In This Article We’ll Cover:
- Information Included in a Subcontractor Agreement
- Common Construction Subcontractor Agreement Clauses
- Contract Best Practices
- Links to Related Resources
- Making It Official
Information Included in a Subcontractor Agreement
When creating a subcontractor agreement for construction, you will want some specific pieces of information. These are often part of construction subcontractor agreement templates:
- Scope of the work
- Price and payment
- Time frame
- Termination of the agreement terms
- Special provisions
- Labor agreements
The last two sections are personalized to each project. The special provisions sections lets the contractor and subcontractor stipulate any special work or provisions for the project. The labor agreements section covers the specific labor required to work on the project, including all of the tasks the contractor and subcontractor will perform.
Common Subcontractor Agreement Clauses
Each clause in a subcontractor agreement is vital to making it legal and effective. Some that you will want to customize to your working agreement include these:
- Inspection and Protection of Work Clause – This clause indicates that the head contractor should maintain the right to inspect and protect the work and worksite. It also gives the subcontractor the right to inspect materials and equipment brought to the job site for the purpose of the subcontractor’s works.
- Claims Clause – This clause requires written notice for claims for additional work or compensation.
- Termination Clause – This tells what terms would allow the contractor to terminate the agreement and how that termination will get communicated with the subcontractor.
- Indemnification Clause – This protects the site owner and contractor against liabilities, actions, claims and demands based on the work of the subcontractor. In other words, if the subcontractor creates issues that create claims for damages, those claims are not the responsibility of the contractor or site owner.
- Insurance Clause – This clause outlines the types and amount of insurance the subcontractor needs to carry. It also provides information about whether or not the contractor or owner must approve the insurance.
- Dispute Resolution Clause – Here the agreement outlines the steps to take to resolve a dispute that arises during the course of the work.
- Warranty Clause – This indicates that all of the supplies and materials furnished and all work completed will be good, free from faults, and in conformation to the rest of the contract.
Construction Subcontractor Agreement Templates Best Practices
In order to make the most out of your construction subcontractor agreement templates, consider these best practices:
- Be Thorough: Make sure that the timelines, dispute resolution, special provisions, and labor agreement sections are thoroughly completed to avoid any confusion or concerns.\
- Mae the Scope of Work Clear: The scope of work section needs to be very clear about what is expected from the subcontractor and when the subcontractor’s work is complete.
- Get it Signed: Both the contractor and the subcontractor need to sign your agreement. It is not legally binding until you do. Use Nitro Sign to send the contract and get it signed easily.
Links to Related Resources
For more information on subcontractor agreement templates, take a look at these resources:
- Subcontractor or Contractor: Understanding the Difference
- LBM Journal: Subcontractor Agreements
- 15 Things to Include in a Subcontractor Agreement
Making It Official
A construction subcontractor agreement template only becomes official when it is signed. Use Nitro Sign to collect signatures securely even if you cannot meet in person and make your agreement official.