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This Agreement is entered by and between Jonas Adam, individually or collectively as the "Signee" and Jane Smith, as the "Signer", together referred to as the "Parties".
The Contract is dated [the date both parties sign].
The Parties agree that the following agreement is dependent on the terms presented as follow:
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A subcontractor is someone who performs part of work on a project for someone else, often the contractor themselves, who in exchange is doing work for the customer. While there are many similarities between a contractor and subcontractor, there are just as many differences. These similarities and differences are important to understand as they have practical implications for the client, contractor, and subcontractor.
For example, in construction or building trade, the contractor typically owns the relationship with the customer and is their single point of contact for the direction, pricing, and other business elements of the project itself. However, a contractor may not have all the necessary skills, tools, people, and other resources to complete special parts of the job, such as painting, electric wiring, HVAC installation and maintenance, and so on. So the contractor will outsource this work to a specialized subcontractor, and will use a subcontractor agreement to make the relationship official.
However, a subcontractor does not always need to be working in construction and does not always need to be providing services. Subcontractors can be involved in any project where the contractor themselves cannot fulfill all the work, and that can include manufacturing, software development, consulting, and a host of other industries.
A subcontractor agreement is the legal document that formalizes the relationship between the contractor and the subcontractor. As mentioned above, this relationship is unique in that only the contractor themselves has a legal relationship with the customer. The subcontractor is working with the
Subcontractor agreements, like many agreements, protect the interests of everyone involved in the transaction by making the expectations and various scenarios very explicit. It should outline who does what and when, and what happens if things go wrong or right.
For example, let’s say that a customer hires a contractor to manage the development of a new condo complex, and then the contractor hires a subcontractor to install electrical wiring. In an idea world, the subcontractor would install the wiring as intended, it would work great, and that would be it. But what happens if the subcontractor doesn’t fulfill the work, or doesn’t do it properly? This would result in a significant loss in money and time for both the contractor and subcontractor. But it’s not just the subcontractor that can create issues. What happens if the subcontractor does a great job but the contractor doesn’t pay them their full rate? If there was no subcontractor agreement in place, it would be difficult. So that’s why a subcontractor agreement is critical to spelling out exactly what everyone will do in every situation.
As a contractor, any time you’re doing work with a subcontractor, it’s recommended that you have a subcontractor agreement. Similarly, if you’re the customer, it’s worthwhile checking with your contractor that they always use subcontractor agreements with their subcontractors. As is often the case with contracts, it’s better to be safe than sorry and it’s best for everyone involved to sign a subcontractor agreement. There are many agreement templates online that are quick to create and will save you alot of hassle.
This is where a subcontractor agreement gets interesting, especially as it relates to the work relationship, expectations, and legal obligations between the customer and the contractor, and then the contractor and subcontractor.
Subcontractors themselves are not responsible for any part of the original agreement between the contractor and the customer. While the contractor can include things in the subcontractor agreement that reduce the risk of things going wrong, ultimately the contractor is promising to the customer through the original contractor agreement that they will deliver certain things.
So, for example, let’s continue with our example above. A customer has hired a contractor to build a complex of condos. The contractor in turn has hired various subcontractors to complete various parts of the construction project, and one of those parts is electrical. Let’s say in the original contractor agreement, the customer specifies that the electrical needs to be done and tested and to code by a certain date or a certain penalty is incurred. If the electrical subcontractor misses that date or otherwise creates issues, it’s not the subcontractor that’s responsible to the client (although they are responsible to the contractor). It’s the contractor themselves that the subcontractor is responsible to.
A subcontrator agreement can have many different components depending on what type of work is being done. Another consideration is what state the work is being done in, or, in a more complex situation, is the work is being done in or across two or more states. It’s important to keep this state aspect in mind, as there are different laws in different US states.
Some of the most common and important clauses in a subcontractor agreement are:
A subcontractor agreement can be in PDF, Microsoft Word, or printed on a piece of paper. However, it’s important to ensure the document is filled out entirely, signed correctly, and that every part has a copy of the agreement for their records.