Subcontractor Agreement

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Subcontractor agreement defining work scope, payment terms, insurance requirements, and liability responsibilities for subcontracted project work.

A subcontractor agreement establishes the legal relationship between a main contractor and a subcontractor for completing specific portions of a larger project. This template is useful for general contractors, project managers, and subcontractors who need a clear written agreement regarding scope, payment, insurance, and performance standards.

When To Use

Use this template when hiring subcontractors for specialized work, portions of a larger project, or temporary labor on construction, renovation, or service projects. It is commonly used in construction, IT, design, and skilled trade industries.

Template

SUBCONTRACTOR AGREEMENT

This Subcontractor Agreement ("Agreement") is entered into on [Date] by and between:

Contractor (Prime Contractor):
Name: [Contractor Name or Company]
Address: [Address]
Email: [Email]
Phone: [Phone]
License Number: [If Applicable]

and

Subcontractor:
Name: [Subcontractor Name or Company]
Address: [Address]
Email: [Email]
Phone: [Phone]
License Number: [If Applicable]
Insurance Certificate: [Attached]

1. PROJECT INFORMATION
Project Name: [Project Name]
Project Location: [Address]
Project Description: [Describe the overall project]

Main Client: [Client Name]

2. SCOPE OF SUBCONTRACTED WORK
The Subcontractor agrees to complete the following specific work:

[Detailed description of subcontractor's responsibilities]

Includes:
- [Specific tasks or deliverables]
- [Materials or equipment to be provided]
- [Quantity and specifications]
- [Quality standards or workmanship requirements]

Does NOT include:
[Clearly list what is outside the scope]

3. PROJECT TIMELINE
Project Start Date: [Date]
Scheduled Completion Date: [Date]
Major Milestones: [List key dates]

Subcontractor agrees to:
- Start work on the scheduled date
- Maintain the agreed work schedule
- Notify the Contractor of any delays within [Number] hours
- Coordinate with other trades and the main Contractor

4. CONTRACT PRICE AND PAYMENT
Total Contract Price: $[Amount]

Payment Structure:
[ ] Fixed Price for Complete Project
[ ] Cost Plus: Labor at $[Amount] per hour + Materials at cost + [Percentage]% markup
[ ] Unit Price: $[Amount] per [unit]
[ ] Day Rate: $[Amount] per day

Payment Schedule:
[ ] Progress Payments: [Percentage] upon milestone completion
[ ] Retainage: [Percentage] held until final completion and inspection
[ ] Final Payment: Due [Number] days after final completion

Accepted Payment Methods:
[Check, bank transfer, ACH, etc.]

Invoicing:
- Subcontractor submits invoices [weekly/bi-weekly/monthly]
- Invoices must detail work completed and materials used
- Payment due within [Number] days of invoice receipt

5. MATERIALS AND EQUIPMENT
Materials Responsibility:
[ ] Contractor provides all materials
[ ] Subcontractor provides all materials
[ ] Contractor provides [specific materials]; Subcontractor provides [other materials]

Equipment Responsibility:
[ ] Contractor provides equipment
[ ] Subcontractor provides equipment and tools
[ ] Subcontractor provides labor only

Storage and Site Maintenance:
Subcontractor agrees to keep the work area reasonably clean and organized.
Subcontractor is responsible for removal of their own waste and debris daily.

6. INSURANCE AND LIABILITY
Subcontractor must maintain throughout the project term:

- General Liability Insurance: Minimum $[Amount]
- Workers' Compensation Insurance: As required by state law
- Auto Liability (if vehicles are used): Minimum $[Amount]
- [Other required insurance]

Proof of Insurance:
Subcontractor must provide Certificates of Insurance before work begins.
Certificates must name Contractor as "additional insured."

Liability:
- Subcontractor is responsible for injuries to their own workers
- Subcontractor indemnifies Contractor for claims arising from Subcontractor's work
- Subcontractor assumes responsibility for damage caused by their work or negligence

7. INDEPENDENT CONTRACTOR STATUS
Subcontractor is an independent contractor, not an employee of Contractor.

Subcontractor is responsible for:
- All payroll taxes and self-employment contributions
- Workers' compensation insurance (or proof of exemption)
- Professional licenses and certifications
- Safety equipment and compliance

8. QUALITY OF WORK
Subcontractor agrees to:

- Perform work in a professional, workmanlike manner
- Comply with all applicable building codes and regulations
- Meet industry standards for the type of work
- Complete work according to project specifications
- Pass all required inspections

Inspections and Defects:
- Contractor has the right to inspect work at any time
- Deficient work must be corrected immediately at no additional cost
- Subcontractor warrants workmanship for [Number] [days/months/years] after completion

9. PERMITS AND COMPLIANCE
Permits Responsibility:
[ ] Contractor obtains all permits
[ ] Subcontractor obtains permits for their portion of work
[ ] Shared responsibility: [Describe]

Compliance:
Subcontractor agrees to comply with:
- All building codes and regulations
- Safety standards and requirements
- Environmental requirements
- OSHA standards (if applicable)
- Project-specific requirements or specifications

10. CHANGE ORDERS
No changes to the scope of work, timeline, or price without written Change Order approval.

Change Order Process:
- Subcontractor submits written request for scope change
- Includes impact on timeline and cost
- Contractor approves or denies in writing
- Only approved changes are billable

11. TERMINATION
Contractor may terminate this Agreement if:

- Subcontractor materially breaches the Agreement
- Work quality falls below acceptable standards
- Subcontractor abandons the project
- [Other termination conditions]

Termination Procedures:
- Contractor provides written notice of breach
- Subcontractor has [Number] days to correct the issue
- If not corrected, termination becomes effective
- Contractor pays for work completed through termination date

12. DISPUTE RESOLUTION
Parties agree to attempt good-faith resolution of disputes before pursuing legal action.

13. SIGNATURES
By signing below, both parties agree to the terms of this Agreement.

Contractor Signature: __________________________
Printed Name: _________________________________
Title: _______________________________________
Date: ________________________________________

Subcontractor Signature: _______________________
Printed Name: _________________________________
Date: ________________________________________

Example

SUBCONTRACTOR AGREEMENT

Date: January 20, 2026

Contractor:
Name: Summit Construction Services

Subcontractor:
Name: Premier Electrical Solutions
License Number: #EL-45891

Project:
Bayshore Office Park Renovation
Location: 850 Commerce Drive

Scope of Work:
Electrical wiring, outlet installation, panel upgrades, and lighting system installation for Phases 1 & 2 renovation.

Contract Price: $28,500 (fixed price)

Payment Schedule:
- 30% upon contract execution: $8,550
- 40% at 50% completion: $11,400
- 30% upon final inspection: $8,550

Project Timeline:
Start: February 1, 2026
Completion: April 15, 2026

Insurance Requirements:
- General Liability: $1,000,000 minimum
- Workers' Compensation: Required by state law
- Contractor added as additional insured

Warranty:
12 months warranty on all electrical work and installation.

Termination Notice:
14 days written notice required if work is below standards.

Contractor Signature: Robert Chen
Date: January 20, 2026

Subcontractor Signature: Michael Torres
Date: January 20, 2026

Frequently Asked Questions

What if the subcontractor's work is defective?

The contract should require the subcontractor to correct deficient work immediately at no additional cost and include a workmanship warranty.

Who is responsible for obtaining permits?

The contract should clearly specify whether the prime contractor or subcontractor obtains permits for their portion of work.

Can the contractor withhold retainage from the final payment?

Yes, retainage (typically 5-10%) is commonly held until final inspection and approval of work.

What if the project timeline changes?

Timeline changes must be documented in a written Change Order that specifies the new schedule and any cost impact.

Is insurance required for all subcontractors?

Yes, most contracts require general liability and workers' compensation insurance with the prime contractor as additional insured.

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