Subcontractor Agreement

Subcontractor Agreement: Set Clear Terms for Subcontracted Work

A subcontractor agreement is a contract between a main contractor and a subcontractor who will carry out part of a larger project. It sets out the work, the timetable, the price and payment terms, quality standards, insurance, liability and how the agreement can end. Robot Lawyer drafts your subcontractor agreement from your answers and frames it under the law of the country or state you choose. On the Verified plan, a legal professional checks it before you sign.

It is also known as a subcontract, a subcontracting agreement or a subcontractor contract.

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What Is a Subcontractor Agreement?

When a business wins a contract with a client, it often brings in specialists to deliver part of the work, such as an electrician on a building project, a developer on an IT project or a designer on a marketing campaign. The main contractor stays responsible to the client, so it needs a written agreement that passes the right obligations down to the subcontractor.

A clear subcontract protects both sides. The main contractor knows exactly what will be delivered, when and to what standard. The subcontractor knows what it will be paid, when and on what terms, and what it is and isn't responsible for.

When Should You Use One?

• Construction and building work
  Trades such as groundworks, electrical, plumbing, roofing, decorating or fit-out.
• IT and software projects
  Development, testing, integration or support work delivered for the main contractor's client.
• Professional and creative services
  Design, copywriting, consultancy, engineering or surveying delivered as part of a wider project.
• Facilities and maintenance
  Cleaning, security, grounds maintenance or repair work under a larger services contract.
• Events and logistics
  Staging, catering, transport or equipment hire for an event or contract.

What's Included in Your Subcontractor Agreement?

• Parties and project
  The main contractor, the subcontractor and any other parties involved, such as the client.
• Scope of work
  A clear description of the work, with any specifications or plans.
• Timetable
  Start and completion dates and any key milestones.
• Price and payment
  The price or rate, how payments are structured, invoicing and when each invoice must be paid.
• Retention
  Any retention held back from payments, and when it will be released.
• Quality and compliance
  The standards and regulations the work must meet.
• Liability, indemnities and insurance
  What each party is responsible for, any indemnities and the insurance cover the subcontractor must hold.
• Confidentiality
  An optional clause protecting the main contractor's and client's information.
• Further subcontracting
  Whether the subcontractor can pass any of the work on to others.
• Termination
  How either party can end the agreement early, and the notice needed.
• Independent contractor status
  Confirmation that the subcontractor is not an employee.
• Governing law
  The country or state whose law applies.

Key Points for Subcontractors and Contractors

• Flow-down of obligations
  The main contractor is usually still liable to the client for the subcontractor's work, so key standards and deadlines in the main contract should be reflected in the subcontract.
• Payment terms
  Clear invoicing and payment periods avoid disputes. Many countries also set statutory payment rules for construction contracts, such as the Housing Grants, Construction and Regeneration Act 1996 in the UK and security of payment laws in Australia, and some allow statutory interest on late business payments.
• Employment status
  Labelling someone a subcontractor doesn't decide their status. What matters is how the relationship works in practice, such as control, substitution and who provides the equipment.
• Tax on payments to subcontractors
  Some countries have special tax rules when you pay subcontractors, such as the Construction Industry Scheme in the UK, Relevant Contracts Tax in Ireland, Form 1099 reporting in the US and taxable payments reporting in Australia. Check the rules where the work is done.
• Insurance
  Make sure the subcontractor's public liability and, where relevant, professional indemnity cover matches the risks of the work.

How It Works on Robot Lawyer

1. Answer the questions
   Tell us about the parties, the work, the timetable, the price and the terms you want.
2. Generate your agreement
   We draft a clear, balanced subcontractor agreement under the law you choose.
3. Get it verified
   On the Verified plan, a qualified legal professional checks the document within 24 hours and makes amendments where needed. See how our documents are verified.
4. Sign and start work
   Both parties sign before work begins, and each keeps a copy.

Robot Lawyer is a subscription. The Essentials plan is £13.99 a month, and the Verified plan, which includes verification of your finished document by a legal professional, is £24.99 a month. Both start with a 7-day free trial. See our pricing.

Subcontractor Agreement FAQs

What is the difference between a contractor and a subcontractor?

A contractor contracts directly with the client. A subcontractor contracts with the main contractor to deliver part of the work and usually has no contract with the client.

Is the main contractor responsible for the subcontractor's work?

Usually, yes. The main contractor normally remains responsible to the client for the whole project, which is why the subcontract should pass down the key standards and deadlines and include suitable insurance and indemnities.

What is a retention?

A percentage of each payment, often a small one, that the main contractor holds back until the work is complete or a defects period ends. It gives the contractor security that defects will be put right. Your agreement says how much is held and when it is released.

Can a subcontractor subcontract the work again?

Only if the agreement allows it. Many main contractors require their written consent first, so they know who is on site or working on the project.

Can I use this agreement outside the UK?

Yes. Your agreement is drafted under the law of the country or state you choose. Our lawyers are qualified in England and Wales and check documents for good practice, clear formatting and the law of England and Wales. They are not qualified in other countries' law, so if your agreement is governed by another country's law, we recommend having a local lawyer check it too.

Create a Verified Subcontractor Agreement Online

Put your subcontracted work on a clear footing in minutes. Related documents: Independent Contractor Agreement, Construction Contract and Service Agreement.