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Subcontractor Agreement

Agreement between a general contractor and subcontractors for specific trades.

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What's included

Scope of Subcontracted Work

Defines the trade work, materials, plans, specifications, exclusions, coordination duties, and standards of workmanship required from the subcontractor.

Payment, Invoicing, and Retainage

Establishes the subcontract price, invoice timing, payment conditions, retainage, lien waiver requirements, and consequences for disputed or incomplete work.

Schedule, Delays, and Coordination

Requires the subcontractor to meet project milestones, coordinate with other trades, promptly report delays, and comply with the general contractor's project schedule.

Insurance, Licensing, and Compliance

Requires the subcontractor to maintain required insurance, licenses, permits, safety compliance, and legal qualifications throughout the project.

Defect Correction, Back-Charges, and Warranty

Allows the general contractor to require correction of defective work, assess back-charges for failures or damages, and enforce workmanship warranty obligations.

Confidentiality and Project Information

Protects drawings, specifications, pricing, owner information, site access details, and other non-public project information shared with the subcontractor.

Termination for Cause or Convenience

Describes when either party may terminate, notice and cure rights, payment for accepted work, and obligations upon demobilization or removal from the site.

Indemnity, Claims, and Dispute Resolution

Allocates responsibility for third-party claims, property damage, injuries, lien claims, and sets procedures for negotiation, mediation, arbitration, or court proceedings.

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Frequently asked questions

What should be included in a subcontractor agreement?
A subcontractor agreement should identify both parties, the project site, the trade work, scope, schedule, payment terms, insurance and licensing requirements, change order procedures, defect correction rights, indemnity, termination rights, and dispute resolution process.
Why are insurance and licensing clauses important?
They help confirm the subcontractor is legally qualified to perform the work and has coverage for injuries, property damage, auto claims, and other construction risks. The agreement should require proof of insurance and any required licenses before work begins.
How should change orders be handled?
The agreement should require written approval before the subcontractor performs extra work or changes the scope, price, schedule, materials, or specifications. This reduces disputes over unpaid extras and unauthorized work.
Can a general contractor back-charge a subcontractor?
Yes, if the agreement permits back-charges and the subcontractor causes defective work, delays, damage, cleanup costs, safety violations, or other costs the general contractor must correct. The clause should define notice, documentation, cure rights, and deduction procedures.

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Templates/Subcontractor Agreement