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How to make a Subcontracting agreement

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Make sure you do things right if you are the main service provider outsourcing work or when you are a subcontractor by using this legally binding subcontract agreement. This subcontract agreement form sets out in clear and simple terms the process to be followed for the provision of services through other persons or companies.

Use this subcontracting agreement if you:

  • are the main contractor for the provision of services
  • wish to subcontract all or some of your work

This subcontracting agreement covers:

  • the subcontracted services
  • price and payment
  • service levels (optional)
  • change control
  • liability (including indemnity for the main contractor)
  • ending the agreement
  • dependency on the main contract

A subcontracting agreement is an agreement between a main contractor and a person or company (a subcontractor) delegating part of the main contractor's work or obligations. It sets out the subcontracted services, pricing and payment, change control (ie procedure for any changes in the services provided and the liability limit for defaulted or defective services). For more information, read Subcontracting work.

You need a subcontracting agreement when you want to subcontract all or some of your work and you want to ensure that you are protected if the subcontractor fails to perform or performs poorly. This agreement will help to ensure compliance with the terms of the main contract.

If any default in the services or defective services appears, the main contractor remains liable to the customer under the main contract for non-performance by the subcontractor even where the customer consents to the subcontracted performance. In this agreement, the main contractor will need to be indemnified by the subcontractor for failure to perform or poor performance. For more information, read Subcontracting work.

In this agreement, you will be able to make changes to the services such as price and payment, volume and specification of services. You will be able to specify them in the schedules attached to this agreement.

The main contractor remains liable for the performance of the main contract, however, if the subcontractor fails to perform their obligations under this agreement, they will be required to compensate for any losses incurred. The subcontractor's liability is limited if the main contractor or its customer fails to perform its obligations and it causes a delay or prevents the subcontractor from performing their obligations.

For more information, read Limitation of liability clauses.

You can terminate this agreement:

  • by giving notice to the other party if some sums were not paid as specified in this agreement. You can specify the number of days within which the payment must be made before terminating the contract
  • if any party commits a material breach of this agreement and it is not remedied within 30 days after being given notice specifying the details of the breach
  • by written notice if the main contract between the main contractor and its client is terminated

Ask a lawyer for:

  • advice if the main agreement does not permit subcontracting
  • advice for subcontracting the provision of goods
  • to check that the subcontract mimics the terms of the main contract, especially as to obligations and liabilities
  • advice if the provision of services relates substantially to the sharing/exchange of data and/or development or use of intellectual property
  • advice if there is pre-existing technology, IP etc.
  • advice if there are embedded customer assets that need to be addressed

This subcontracting agreement is governed by the law of England and Wales or the law of Scotland.

Other names for Subcontracting agreement

Subcontractor agreement, Subcontractor contract, Sub-contracting agreement, Sub-contracting contract.