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What is a Subcontractor Agreement?

As a general contractor, there may be times when extra help is needed to get a job done. Whether you're a subcontractor or just hiring one, a Subcontractor Agreement helps protect the interests of all parties by outlining expectations for the job so that your construction project is completed successfully.

When to use a Subcontractor Agreement:

  • You are a construction subcontractor and will be providing services and labor for a general contractor.
  • You are a general contractor and wish to hire a subcontractor to do some or all of the work for a construction project.

Sample Subcontractor Agreement

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SUBCONTRACTOR AGREEMENT

 

 

This Subcontractor Agreement (this "Agreement") is made effective as of , by and between , of , ,   ("") and , of , ,   ("").

 

 

RECITALS

 

has entered into a contract dated (the "Original Contract") with of , ,   (""). Under the Original Contract, has agreed to . wishes to subcontract with for a portion of the services contemplated by the Original Contract. is willing to provide such services.

 

 

AGREEMENT

 

Therefore, in consideration of the mutual promises contained in this Agreement, the parties agree as follows:

 

. Description of Services. Beginning on , will provide the following services and/or materials (collectively, the "Services") as described on the attached Exhibit A. : . These services will be performed at the following address: , ,  .

 

will complete the Services strictly in accordance with any applicable plans and specifications as contained in the Original Contract, and in a workmanlike manner, meeting all local and state building codes, including the Uniform Building Code or other applicable local regulations.

 

. Payment for Services. In exchange for the Services, will pay  in the amount of . an amount equal to 's actual cost of labor and materials, plus percent of the total of such labor and materials.  Payment will be made, less retainage, when the Services are completed. not later than days after the Services have been completed.    will withhold no more retention from than is being withheld by from with respect to 's work. will withhold percent of each payment. The retained amount shall be paid by within days after completion of the Services and acceptance of those Services by or 's designated agent. will, if requested, provide final lien waivers upon final payment of all sums due .

 

. Completion. All Services shall be completed by on or before .

 

. Permits. shall be solely responsible for obtaining and paying for all necessary permits, licenses, and any other instruments required to perform the Services. will fully cooperate with in the obtaining of any permits and licenses, as necessary. shall be solely responsible for obtaining and paying for all necessary permits, licenses, and any other instruments required to perform the Services. will fully cooperate with in the obtaining of any permits and licenses, as necessary.

 

. Indemnity and Insurance.

 

a. agrees to indemnify and hold harmless , Owner, Design Professionals, and their respective agents and assigns from all claims, losses, damages, expenses, fees including attorney fees, costs, settlements and judgments arising out of the performance of or resulting in whole or in part from the actual or alleged acts, omissions, or breaches of this Subcontract by , or the violation of any relevant laws by or its employees, agents or others under its control while performing the Services under this subcontract.

 

b. shall present, upon 's request, adequate proof that maintains worker's compensation and disability insurance to the extent and in the amount required under law. shall also maintain builder's all-risk insurance covering , and against personal injuries and property damage. Personal injury coverage shall not be less than for one person and per single accident, and property coverage shall not be less than for one accident and in the aggregate. shall provide with written proof of compliance with this paragraph prior to the commencement of the Services. shall maintain insurance policies, of each and every type, and with provisions and coverage amounts substantially identical to, corresponding requirements of as described by the terms of the Original Contract. shall provide with written proof of compliance with this paragraph prior to the commencement of the Services.

 

. Change Orders. If requests or requires any change either expanding or limiting the work to be performed under the Original Contract, shall accept such change orders. agrees to provide with written notice of any such change orders as soon as practical after receives such notice. Any resulting increase or decrease in the subcontract price provided for in Paragraph 2 must be in writing, mutually agreed to, and signed by both parties. If the parties are unable to reach an agreement regarding any price adjustment for a change order, will proceed with the change order work and the matter shall be submitted to arbitration under the laws of the within thirty days from the issuance of the change order. Such arbitration shall set the change order price allowing a reasonable profit, after considering direct costs and reasonable overhead expenses.

 

. Unforeseen Conditions and Acts of God.

 

a. Reasonable additional, unexpected costs directly related to an existing, concealed condition or other situation that may be revealed during construction, shall be the sole responsibility of . Further, shall not be held responsible for reasonable delays caused by such conditions.

 

b. This Agreement is subject to force majeure, including without limitation, accidents, acts of God, fire, explosion, vandalism, storm, weather conditions, labor strikes, orders or acts of military or civil authority, national emergencies, insurrections, riots, wars, or other delays beyond the reasonable control of the parties. shall not be held responsible for reasonable delays caused by such events, but shall use reasonable efforts under the circumstances to avoid or remove such causes of non-performance.

 

c. Nothing in this Agreement shall preclude 's claims for recovery of delay damages caused by , Owner, Design Professionals or parties other than Subcontractor, its employees, agents or others under Subcontractor's control on this project.

 

. Default. The occurrence of any of the following shall constitute a material default under this Agreement:

 

a. The failure of to make a required payment when due.

 

b. The insolvency or bankruptcy of either party.

 

c. The subjection of any of either party's property to any levy, seizure, general assignment for the benefit of creditors, application or sale for or by any creditor or government agency.

 

d. The failure of to deliver the Services in the time and manner provided for in this Agreement.

 

. Remedies on Default. In addition to any and all other rights available according to law, if either party defaults by failing to substantially perform any material provision, term or condition of this Agreement (including without limitation the failure to make a monetary payment when due), the other party may elect to terminate this Agreement if the default is not cured within days after providing written notice to the defaulting party. The notice shall describe with sufficient detail the nature of the default.

 

. Relationship of the Parties. The provisions of this Agreement are not intended to create, nor shall be deemed or construed to create, any joint venture, partnership or other relationship between and other than that of independent entities contracting with each other solely for the purpose of carrying out the provisions of this Agreement. Neither of the parties to this Agreement, nor any of their respective employees, agents, or other representatives, shall be construed to be the agent, employee or representative of the other party. Neither party shall have the authority to bind the other party nor shall a party be responsible for the acts or omissions of the other party, unless otherwise stated in this Agreement. Similarly, expressly acknowledges that is not an agent, employee or representative of and covenants to represent itself accordingly.

 

. Access, Signage Rights and Design Plans.

 

a. During the term of this Agreement, shall have at all times reasonable access to the construction site, and both and will take all reasonable steps necessary to coordinate the progress of construction with other subcontractors so that the project can be completed in a timely manner.

 

b. During the term of this Agreement, may erect one temporary sign showing its name, service mark, trade name or other commercial name, identifying as performing services on the construction project. The sign must be appropriate in appearance, style and size, and must conform to all applicable federal, state and local laws.

 

c. will make available to all plans, specifications, drawings, blueprints, and similar construction documents necessary for to provide the Services. Any such materials shall remain the property of . will promptly return all such materials to upon completion of the Services.

 

. Notices. Any notice or communication required or permitted under this Agreement shall be sufficiently given if delivered in person or by certified mail, return receipt requested, to the addresses listed above or to such other address as one party may have furnished to the other in writing. The notice shall be deemed received when delivered or signed for, or on the third day after mailing if not signed for.

 

. Entire Agreement. This Agreement contains the entire Agreement of the parties regarding the subject matter of this Agreement, and there are no other promises or conditions in any other agreement whether oral or written.

 

. Waiver. No waiver by either party of any breach of this Agreement shall be deemed to waive any other breach. No acceptance of payment or performance after any breach shall be deemed a waiver of any breach. No failure or delay to exercise any right by a party upon another's default shall prevent that party from later exercising that right, nor shall such failure or delay operate as a waiver of any default.

 

. Severability. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

 

. Amendment. This Agreement may be modified or amended only if made in writing and signed by both parties.

 

. Applicable Law. This Agreement shall be governed by the laws of the State ofCommonwealth of .

 

. Assignment. Neither party may assign or transfer this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld.

 

. Dispute Resolution. The parties will attempt to resolve any dispute arising out of or relating to this Agreement through friendly negotiations amongst the parties. If the matter is not resolved by negotiation, the parties will resolve the dispute using the below Alternative Dispute Resolution (ADR) procedure.

 

Any controversies or disputes arising out of or relating to this Agreement, other than those described in the Section entitled "Change Orders," will be submitted to mediation in accordance with any statutory rules of mediation in the State of . If mediation does not successfully resolve the dispute, the parties may proceed to seek an alternative form of resolution in accordance with any other rights and remedies afforded to them by law.Any controversies or disputes arising out of or relating to this Agreement, other than those described in the Section entitled "Change Orders," will be resolved by binding arbitration under the rules of the American Arbitration Association. The arbitrator's award will be final, and judgment may be entered upon it by any court having proper jurisdiction.Any controversies or disputes arising out of or relating to this Agreement, other than those described in the Section entitled "Change Orders," will be submitted to mediation in accordance with any statutory rules of mediation in the State of . If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues will be submitted to binding arbitration under the rules of the American Arbitration Association. The arbitrator's award will be final, and judgment may be entered upon it by any court having proper jurisdiction.

 

. Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, the parties and their respective heirs, representatives, successors and assigns.

 

. Signatories. This Agreement shall be signed by , on behalf of and by , on behalf of and shall be effective as of the date first written above.

 

 

 

SUBCONTRACTOR:

 

 

 

By:   Date:  

 

 

GENERAL CONTRACTOR:

 

 

 

By:   Date:  

 

 

 

 

Statutory Notice to Preserve Lien Rights at Outset of Project

 

,  

 

 

,  

 

Re: Project

 

To Whom It May Concern:

 

We are pleased to have been selected to serve as the Subcontractor to for purposes of providing  the services described in the attached document on the project. New Hampshire R.S.A. 447:5, 447:6, and 447:8 requires us to advise you of our role in the project so that you will be aware of all parties who would have any rights pursuant to RSA 447 in connection with the project.

 

Please contact us if you have any questions. We look forward to working with you and toward the successful completion of the project.

 

Very truly yours,

 

 

 

_________________________________

Subcontractor

 

cc:

 

NOTICE OF THE RIGHT TO CLAIM A LIEN

 

WARNING: READ THIS NOTICE. PROTECT YOURSELF FROM PAYING ANY CONTRACTOR OR SUPPLIER TWICE FOR THE SAME SERVICE. This is to inform you that of , ,   has begun to provide  the services described in the attached Subcontractor Contract ordered by , , ,   for improvements to property you owned by , , , , . The property is located at , ,  . If is not paid, a lien may be filed against the property. THIS IS NOT A LIEN. It is a notice sent to you for your protection in compliance with the construction lien laws of the state of Montana.

 

This notice has been sent to you by:

NAME:

ADDRESS: , ,  

TELEPHONE:

 

Under Montana's laws, those who work on your property or provide materials and are not paid have a right to enforce their claim for payment against your property. This claim is known as a construction lien.

 

If your contractor fails to pay subcontractors or material suppliers or neglects to make other legally required payments, the people who are owed money may look to your property for payment, even if you have paid your contractor in full.

 

The law states that all people hired by a contractor to provide you with services or materials are required to give you a notice of the right to claim a lien to let you know what they have provided.

 

WAYS TO PROTECT YOURSELF ARE:

 

-- RECOGNIZE that this notice of delivery of services or materials may result in a lien against your property unless all those supplying a notice of the right to lien have been paid.
-- LEARN more about the construction lien laws and the meaning of this notice by contacting an attorney or the firm sending this notice.
-- WHEN PAYING your contractor for services or materials, you may make checks payable jointly to the contractor and the firm furnishing services or materials for which you have received a notice of the right to claim a lien.
-- OBTAIN EVIDENCE that all firms from whom you have received a notice of the right to claim a lien have been paid or have waived the right to claim a lien against your property.
-- CONSULT an attorney, a professional escrow company, or your mortgage lender.

 

 

CONTRACTOR:

 

 

___________________________________ Date: ________________
, for Claimant
,  

 

Signed and sworn before me as to the truth of all of the above facts by the Contractor this ____ day of __________________, 20___.

 

____________________________________________

Notary Public

State of Montana

My Commission Expires: _________________

 

NOTICE OF THE RIGHT TO CLAIM A LIEN

 

This Notice is to inform you that of , ,   has begun to provide  the services described in the attached Subcontractor Contract ordered by , , ,   for improvements to property you owned by , , , , . The property is located at , ,   and is legally described as . If is not paid, a lien may be filed against the property. THIS IS NOT A LIEN. It is a notice sent to you for your protection in compliance with the construction lien laws of the state of Alaska.

 

This notice has been sent to you by:

NAME:
ADDRESS: , ,  
TELEPHONE:

 

Under Alaska laws, those who work on your property or provide materials and are not paid have a right to enforce their claim for payment against your property. This claim is known as a construction lien.

 

WARNING: Unless provision is made for payment of sums that may be due to the undersigned, your above property may be subject to foreclosure to satisfy those sums even though you may pay a prime contractor or other person for the labor, material, service, or equipment furnished by the undersigned.

 

CONTRACTOR:

 

 

___________________________________ Date: ________________
, for Claimant
,  

 

 

 

NOTICE OF RIGHT TO A LIEN

(ORS 87.021)

 

Warning: Read this notice.

Protect yourself from paying any contractor or supplier twice for the same service.

 

 

To:

,  

 

Date of Mailing: __________________

 

This is to inform you that has begun to provide  the services described in the attached document ordered by for improvements to property you own and has contracted with to assist in the completion of these services. The property is located at , ,  .

 

A lien may be claimed for all materials, equipment, labor and services furnished after a date that is eight days, not including Saturdays, Sundays, and holidays, as defined in ORS 187.010, before this notice was mailed to you. Even if you or your mortgage lender has made full payment to the contractor who ordered these materials or services, your property may still be subject to a lien unless the supplier providing this notice is paid.

 

THIS IS NOT A LIEN. It is a notice sent to you for your protection in compliance with the construction lien laws of the State of Oregon.

 

 

This notice has been sent to you by:

 

Name:

Address: , ,  

Phone:

 

If you have questions about this notice, feel free to call us.

 

 

See reverse side (or following page) for more important information.

 

 

 

Under Oregon's laws, those who work on your property or provide labor, equipment, services or materials and are not paid have a right to enforce their claim for payment against your property. This claim is known as a construction lien.

 

If your contractor fails to pay subcontractors, materials suppliers, rental equipment suppliers, service providers or laborers, or neglects to make other legally required payments, the people who are owed money can look to your property for payment, even if you have paid your contractor in full.

 

The law states that all people hired by a contractor to provide you with materials, equipment, labor or services must give you a Notice of Right to a Lien to let you know what they have provided.

 

WAYS TO PROTECT YOURSELF ARE:

 

- RECOGNIZE that this Notice of Right to a Lien may result in a lien against your property unless all those supplying a Notice of Right to a Lien have been paid.
- LEARN more about the lien laws and the meaning of this notice by contacting the Construction Contractors Board, an attorney or the firm sending this notice.
- ASK for a statement of the labor, equipment, services or materials provided to your property from each party that sends you a notice of right to a lien.
- WHEN PAYING your contractor for materials, equipment, labor or services, you may make checks payable jointly to the contractor and the firm furnishing materials, equipment, labor or services for which you have received a notice of right to a lien.
- OR use one of the methods suggested by the "Information Notice to Owners." If you have not received such a notice, contact the Construction Contractors Board.
- GET EVIDENCE that all firms from whom you have received a notice of right to a lien have been paid or have waived the right to claim a lien against your property.
- CONSULT an attorney, a professional escrow company or your mortgage lender.

 

Learn more about the lien law by requesting a booklet from the Construction Contractors Board called Construction Liens (503-378-4621 or www.oregon.gov/CCB). It contains an explanation of construction liens, how consumers can protect themselves and contractor responsibilities.

 

 

 

Final Checklist for Subcontractor Agreement

General Contractor:

Subcontractor:

Owner:

 

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Next Steps: Make It Legal

 

_____ The Subcontractor Agreement should be signed by both the Subcontractor and the General Contractor. The Agreement becomes effective as of the date indicated in the document.

 

_____ Both parties should retain a copy of the signed Subcontractor Agreement.

 

_____ All Subcontractors are required to provide the Property Owner with a Notice of Right to Lien in order to preserve its right to file a lien. The Notice of Right to Lien included after your Contract can be served on the Property Owner.
_____ The included Notice of Right to Lien should be served on the Property Owner prior to starting work on the project.
_____ The Subcontractor is required by New Hampshire state law to provide the Property Owner with a notice of the Subcontractor's rights. This Notice helps secure the Subcontractor's right to file a Mechanic's Lien should one become necessary. The Notice must be provided to the Property Owner BEFORE the Subcontractor starts work on the project. The required Notice has been included at the end of this Subcontractor Agreement.
_____ The Subcontractor is required by Oklahoma state law to provide the Property Owner with a notice of the Subcontractor's right to a lien. This Notice helps secure the Subcontractor's right to file a Mechanic's Lien should one become necessary. The Notice must be provided to the Property Owner. The required Notice has been included at the end of this Subcontractor Agreement for your convenience.

Copies

 

Give a signed copy of the document to:

 

_____ 

 

_____ 

 

 

Other Information

 

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

 

* It is not necessary that the signatures be witnessed or notarized.

 

* Original copies should be kept in a secure location.

 

Reasons to Update

 

* Change in conditions or terms of the Agreement before it is signed.

 

* Performing similar services at a new project site on similar terms.

 

Members can always consult an attorney at no extra cost! 

 

* If you have quick questions or wish to review this document with an attorney, you can do so for free. Rocket Lawyer's On Call® service makes it fast and easy to speak with a local attorney. Get started by visiting the Find a Lawyer tab on our site, or calling (866) 243-2183.

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Subcontractor Agreement FAQs

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  • What is a master subcontract agreement?

    A master subcontractor agreement is a written agreement made between a contractor and subcontractor. Contract clauses in a master subcontract agreement will apply to future subcontracts made between the contractor and subcontractor.

  • How do I write a subcontract agreement?

    Making a Subcontractor Agreement online is simple. Just answer a few questions, and Rocket Lawyer will build your document for you. Consider these questions beforehand to make the process speedier:

    • When will this agreement become effective?
    • Where will the services be performed?
    • What is the date and for what services was the original contract entered into?
    • How will the subcontractor be paid? How much will the subcontractor be paid?

    Please note that this agreement is designed to be used in a construction context only. If you don't have all of the details you need, you can skip questions, and save your document for later.

  • What should be included in a subcontractor agreement?

    As an agreement between a general contractor and subcontractor, a Subcontractor Agreement should describe the services and materials provided by the subcontractor, price of the work, and warranties of the parties. Other important clauses a Subcontractor Agreement should have include: insurance, default, change orders, and indemnification.

  • Do subcontractors get a 1099?

    Yes, subcontractors get a 1099 Form. In general, you are required to send a 1099 Form to vendors or subcontractors if they are paid more than $600 from working with you during the calendar year.

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