Subcontractor agreement meaning
The subcontractor gets a specific job from the general contractor with a particular contract. If you are working as the subcontractor, you have to sign the subcontractor agreement with the client or employer. It is also possible for the subcontractor and another subcontractor to deal with a contract and share projects.
On this page, you will find the construction subcontractor agreement PDFs, which will give you more ideas in drafting this contract. There is also simple subcontractor agreement template Word that you can use to write as many as a document with its clear format and understandable clauses. You can add or remove items you don’t need quickly.
Things You Need To Know About Subcontractor Agreement
- Rights – The rights of the subcontract is governed in the agreement. Both parties are bound legally, which they should fulfil the responsibilities until the contract complete. If one of the party feels their business partner has breached the agreement, then he/she can take the legal action. Certain things that can make a subcontractor sue the business partner is if the stable and healthy environment is failed to reach.
- Duties and obligation – Besides getting rights, the subcontractor should comply with anything stated in the agreement. Certain factors, like punctuality and time off, are essential. Besides, the subcontractor should make excellent communication to work effectively and also avoid problems. At least, the project should be fulfilled by the due dates. High-quality works are valued more in this matter.
- Tax obligation – Of course the subcontractor should be responsible with the taxes and they need to report their revenue. Besides, they also need to stay keeping in track with their labours and expenses. Recording each of it will be beneficial for the tax purpose.
Things You Must Understand When Entering An Agreement
- Scope of work – Because the subcontractor will work for the general contractor, then they need to specify the range of work. It should follow the speciality of the subcontractor. Besides, a broader scope of work will be more challenging to control and complete because the job description is not well defined.
- Supply chain – Another factor that needs to be underlined is the operational risk and supply chain. Sometimes, the items specified are not under the subcontractor’s control which this thing should not be the subcontractor mistake. Therefore, this should be stated in the agreement to avoid conflict in the middle of the project.
- Defence and indemnification – There is also defence and indemnification, which the burden should not for the subcontractor. However, some states already set up laws that will avoid the subcontractor from unfair compensation.
- Insurance, liens and bonds – These things are usually specified in the contract to limit the ability of subcontractor from using mechanics lien when there is late payment.
- Warranty – Subcontractor generally specifies the guarantee of their service. However, this depends on the project and the benefit they will get.
Subcontractor Agreement Template Sample