Free Subcontractor Agreement

The Agreement must include a completion date, providing that all services must be completed by this date. If the Subcontractor has been unable to complete the duties by that time, the Subcontractor will be in breach of the Agreement unless there is a valid excuse for the late performance.

The Subcontract provides that, in addition to any other rights provided by law, either party may terminate the Subcontract if the other party has materially failed to perform its obligations under the Subcontract. The default provision also defines several specific events, including the failure to make payments when due, that will be treated as a breach, or default, of the Subcontract. The non-breaching party must provide the defaulting party with written notice of the breach and an opportunity to cure the default within a specified number of days. A typical cure period is between ten and thirty days. If the party in default fails to remedy the situation in the specified number of days, the non-breaching party may generally elect to terminate the Subcontract.

A very detailed explanation of the work to be performed by the Subcontractor for the General Contractor should be included, either within the Agreement or on an Exhibit document which will then be attached to the Agreement. Additionally, all materials that the Subcontractor must provide should be listed within the Agreement or on an Exhibit document. If the original contract has a thorough explanation of the jobs to be completed, perhaps a portion of that contract can simply be reproduced in the subcontract to define the duties of the Subcontractor. Finally, if a certain minimum quality of materials must be used by the Subcontractor or if a particular manufacturer's goods must be used, that information should also be included in the description.

A Subcontractor Agreement should include provisions that:

1. make it clear that the Agreement contains the entire agreement of the parties,

   
   

2. require changes to the Agreement to be in writing, signed by both parties,

   
   

3. protect the Agreement if one of its provisions is unenforceable,

   
   

4. make it clear that the rights of the parties are cumulative (can use all rights) and not exclusive (limited to the right that is exercised first), and

   
   

5. specify which state's laws will govern disputes between the parties.

The Subcontractor Agreement requires that the Subcontractor "indemnify" (defend) the General Contractor for any injuries or damages that the General Contractor may encounter or be exposed to through the acts of the Subcontractor. This essentially means that the Subcontractor is responsible if something or someone is harmed because of the activities of the Subcontractor. In order to ensure that the Subcontractor will have the necessary capital to compensate the General Contractor if there is an injury or accident, the Agreement also requires the Subcontractor to carry several types of insurance, in adequate amounts, to protect the General Contractor from liability. If the General Contractor is required to maintain certain types and levels of insurance under the Original Contract with the Owner, the Subcontractor Agreement can require the Subcontractor to carry similar insurance. Otherwise, the Agreement can be customized to clearly state the type and minimum amount of coverage the Subcontractor must maintain. The Subcontractor must also be prepared to present the General Contractor with proof that such insurance has been obtained.

It is important during a construction job that all parties working on the project be given access to the building site when necessary. Further, when many subcontractors are working at one site together, a certain amount of coordination between the subcontractors and the General Contractor is necessary. The Subcontractor Agreement contains a provision that states that the General Contractor will provide the Subcontractor with necessary access to the premises for the Subcontractor to complete the work. In exchange, the Subcontractor agrees to cooperate with other subcontractors during the construction process.

The Agreement also allows the Subcontractor to erect one sign with the Subcontractor's name, to get some publicity from working on the project. The sign must be temporary and must comply with all local laws and ordinances.

Finally, the Agreement provides that the Subcontractor will be provided with any plans and specifications that the Subcontractor will need to complete the project. The plans and drawings should be returned to the General Contractor after the services have been completed.

If possible, the parties should review the terms of the original contract between the owner and the general contractor to be sure that nothing in the subcontract will be inconsistent with it. For example, the original contract may require the owner's consent to the subcontract for it to be effective.

The simplest way to state the pricing method is for the parties to simply agree to an amount. For example, "$36,000 for all labor and materials to be furnished under the Agreement". Other options are available. The parties could agree that the General Contractor will reimburse the Subcontractor for the cost of the parts and labor used to complete these services, plus some percentage of those costs as a mark-up. For example, "costs plus six percent". This method guarantees the Subcontractor a minimum profit. If another method is preferred, it should be clearly described within the Agreement to avoid any confusion at a later date.

The Agreement should also provide for when the payment will be due. The payment can be made when the services are completed, at a predetermined date, or on some other schedule (for example, if progress payments are desired).

Often, construction projects require that several different permits or licenses be obtained, sometimes prior to beginning construction. The Subcontractor Agreement allows the parties to clearly indicate which party has the responsibility to obtain these instruments. The Agreement also provides that the party not in charge will cooperate (i.e., sharing information, agreeing to sign any applications as necessary, etc.) with the party responsible for the permits so that the application process may be completed in an efficient matter.

For several reasons, it is important that the legal relationship existing between the parties be clearly identified as that of a Subcontractor-General Contractor relationship, and not as some other relationship such as a joint venture or an employee-employer relationship. The Subcontractor Agreement attempts to clarify and limit this relationship by articulating the nature of the relationship.

It is a common practice for the General Contractor to withhold a portion of each payment from the Subcontractor until after all Services have been completed and the Owner has accepted the work. Typically, the Owner will have an architect or engineer inspect the completed project before acceptance is granted. When this event occurs, the Owner will make the final payment to the General Contractor who will in turn disburse any retained funds that have been withheld to the Subcontractors.

1. The Subcontractor Agreement should be signed by both the Subcontractor and the General Contractor. It is not necessary that the signatures be witnessed or notarized. The Agreement becomes effective as of the date indicated in the document.

   
   

2. Both parties should retain a copy of the signed Subcontractor Agreement in a secure location.

   
   

3. The document should be reviewed periodically to ensure that the parties are each complying with their respective obligations.

A Subcontractor Agreement is an agreement between a general contractor (the "General Contractor") and another party who has subcontracted to perform work and services for the General Contractor (the "Subcontractor"). The General Contractor is the party who will contract directly with the owner of the property on which the Subcontractor will be working. Frequently, the General Contractor has portions of the larger project that the General Contractor prefers not to do. Therefore, the General Contractor contracts those portions out to another party, the Subcontractor.

If it is available, the Subcontractor may wish to review the Original Contract between the Owner and the General Contractor to be sure that there are no conflicting terms between it and the anticipated Subcontractor Agreement.

This agreement allows the parties to describe which services and materials the Subcontractor will provide, specify the price for the work, and assign various rights and liabilities between the parties. Important provisions regarding indemnification, insurance, change orders, unforeseen conditions, defaults, the nature of the parties' relationship and miscellaneous concerns are also included.

This agreement should be signed by both parties and becomes effective as of the date inserted at the beginning of the agreement.

Because construction projects are often filled with uncertainty, a Subcontractor will want to specify that the Subcontractor is not responsible for any delays or extra costs caused by certain events that are completely out of the Subcontractor's control. For example, there may be an unexpected condition on the property that no one could have predicted when the project was started, or there may be a tornado or other natural disaster that destroys a nearly-completed project. The Agreement contains a provision that excuses the Subcontractor from timely completion of the Services if these events occur.