What should go into a subcontractor agreement?

On Behalf of | Mar 28, 2023 | Construction Law

When working with subcontractors, it’s important to use contracts and official documentation. This can clearly define the role between the two parties. It helps to limit disputes and perhaps solve those that do occur anyway.

But what goes into a subcontractor agreement? Let’s take a look at three examples:

1. Terms of payment

First of all, many disputes simply revolve around financial issues and payment. The contract should specify if the subcontractor is going to get a flat fee or an hourly rate, for example. It should also specify exactly how much they should be paid and when it will happen.

2. The scope of the work to be performed

Additionally, the exact job that the subcontractor is expected to carry out should be clearly defined. There could be disputes, for instance, if a subcontractor believes they are only supposed to work on a certain portion of a project. It’s very important for the entire scope to be defined in advance so they know exactly how much compensation to anticipate and what work to complete before the job is done.

3. Issues with change orders

In some cases, change orders happen. Many who work in the construction industry understand that this is just a fact of life and part of the project. Even so, this can lead to disputes when they are not addressed upfront. Subcontractors need to know what these orders entail and how to approve them or work out the details.

Having excellent contracts in advance can make things go much more smoothly on any construction project. All involved need to know about the legal steps they should take to do so.