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Why It’s Used
Construction subcontractor agreements are used so that general contractors can hire licensed tradesmen and record the terms of the relationship in writing. Contractors often draft these agreements to delegate tasks like plumbing or HVAC installation to subcontractors with specialized training, ensuring the work complies with industry standards and trade-specific regulations.
What Should Be Included
Party Information – Identifying the parties’ legal names and addresses is necessary. Without these details, enforcing the agreement following a contract violation could prove difficult.
Service Obligations – It’s important to relay the scope of the work the subcontractor is hired to complete and mention any applicable exclusions.
Expenses – The form should list the parties’ expense obligations. Generally, subcontractors are responsible for materials, equipment, and all other expenses needed to complete the construction project.
Payment – Payment terms determine the amount and method of compensation. Most subcontractor contracts grant a fixed fee upon completion of the services or an hourly rate paid periodically.
Indemnification – An indemnification clause protects the contractor and client from liability for issues caused by the subcontractor’s performance, such as personal injury or property damage.
Contract Termination – The termination clause outlines procedures for ending the contract before the original expiration date.
Sample
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CONSTRUCTION SUBCONTRACTOR AGREEMENT
1. THE PARTIES. This Subcontractor Agreement (“Agreement”) is made between [CONTRACTOR NAME], with a mailing address of [CONTRACTOR ADDRESS] (“Contractor”), and [SUBCONTRACTOR NAME], with a mailing address of [SUBCONTRACTOR ADDRESS] (“Subcontractor”).
WHEREAS, the Contractor intends to pay the Subcontractor for Services provided, effective [DATE], under the following terms and conditions:
2. THE CLIENT. The Subcontractor acknowledges that any work performed under this Agreement must be in accordance with the latest version of the agreement made between the Contractor and [CLIENT NAME], who has a mailing address of [CLIENT ADDRESS] (“Client”).
3. SERVICES & RESPONSIBILITIES. The Subcontractor agrees to perform and be responsible for the following: [LIST SERVICES AND RESPONSIBILITIES] (“Services”).
The Subcontractor shall not be responsible for any items that are not listed unless otherwise stated in this Agreement.
4. LOCATION. The primary location for the Services shall be [ADDRESS].
5. START & END DATES. The Subcontractor shall be permitted to begin the Services on [DATE] and shall complete the Services in a reasonable time period in accordance with industry standards.
6. PAYMENT. The Contractor shall pay the Subcontractor $[AMOUNT] per [PAYMENT BASIS (E.G., HOUR)] for the Services. Payment shall be made by [PAYMENT METHOD] every [PAYMENT FREQUENCY].
7. TERMINATION. Either party can terminate this Agreement by providing [#] days’ notice to the other party.
8. SUBCONTRACTING. The Subcontractor shall (☐ Have | ☐ Not Have) the right to subcontract, either in part or in whole, the Services authorized under this agreement.
9. DISPUTES. If a dispute arises concerning the provisions of this Agreement or the performance of any of the parties mentioned, the parties hereby agree to settle the dispute by equally paying for binding arbitration as regulated under the laws in the state where the Services are being performed.
10. ASSIGNMENT. The Subcontractor shall not have the right to assign any rights under this Agreement or any part of the Services issued herein. Subject to the foregoing, this Agreement shall be binding upon the parties’ heirs, executors, successors, and assigns.
11. REQUIRED LICENSES. All parties to this Agreement, including other subcontractors and the parties’ employees and agents, must be licensed per state laws governing their trade.
12. INDEMNIFICATION. The Subcontractor shall indemnify and hold the Contractor and Client harmless from any loss or liability from performing the Services under this Agreement.
13. INDEPENDENT CONTRACTOR. The Subcontractor is an independent contractor, and neither the Subcontractor nor their employees or contract personnel are or shall be deemed the Contractor’s employees.
14. GOVERNING LAW. This Agreement shall be governed under the laws in the State of [STATE].
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates written hereunder.
Contractor Signature: _____________________ Date: [DATE]
Print Name: [CONTRACTOR NAME]
Subcontractor Signature: _____________________ Date: [DATE]
Print Name: [SUBCONTRACTOR NAME]