What a subcontractor agreement does
When you hire another business to do part of a job, the agreement says what they will do, for how much, by when, and what happens if something goes wrong. It also sets how they get paid, which is where most disputes between contractors start.
What to put in it
- The project, the owner and the address.
- The scope, in lines the sub can price and you can check.
- The price, and whether it is fixed or by unit.
- Start and finish dates.
- Retainage, if any, and when it is released.
- Insurance the sub must carry and a certificate before starting.
- Payment timing, change orders, cleanup and safety.
- Signatures from both businesses.
Not legal advice
This is a template, not legal advice. States differ on pay-when-paid and pay-if-paid clauses, indemnity, lien rights, retainage and worker classification. Check your state's rules, and have an attorney read your agreement before you rely on it.
Subcontractor or employee
Calling someone a subcontractor does not make them one. Agencies look at who controls the work, who supplies the tools and whether they run their own business. The IRS and the Department of Labor both publish guidance, and your state may have its own test.
More free templates
- Construction Bid: Package, lines, overhead and profit, inclusions and exclusions.
- Schedule of Values: Percent complete, balance and retainage worked out per line.
- Submittal: Spec section, items, attachments, answer-by date and review action.
- Material Take-off: Measured quantity, waste, order quantity and cost.
- WIP Schedule: Percent complete, earned revenue and over or under billing.
- Timesheet: Hours worked out per day, the week's total and hours over 40.
- Expense Tracker: Every expense with its job and category, totalled.
- Job Sheet: Times, tasks and parts, what was found and signatures.
- Every template, including estimates, invoices and proposals for 35 trades.