When you hire a general contractor for a construction project, HVAC installation, or roof replacement, they might not always know precisely what they need to do.
Perhaps they run into a situation where a particular job requires a license the contractor doesn't have or merely doesn't have the expertise to complete it.
They typically hire a subcontractor to take care of a specific part of a contract when that happens. But before the subcontractor can start the job, they should enter a Subcontractor Agreement with the general contractor.
A Subcontractor Agreement is a straightforward contract between two parties working on the same project. The hired contractor reaches out to a subcontractor and offers them the work.
In the Subcontract Agreement, they outline the terms of the contract and the payment information. For example, if you hire a general contractor to replace drywall, but the job requires electrical work, they may hire an electrician for this one task.
The Subcontractor Agreement should contain all the necessary information about parties involved, the scope of work, change orders, dispute resolution protocol, and details about termination. It should also specify the duration of the contract.
Depending on your state, a Subcontractor Agreement may also be known as:
Subcontract Agreements are necessary in cases where you need to hire another person or a business to complete a project.
The scope of the work and the reasons for a Subcontract Agreement may vary, but it's essential to put the agreed terms in writing.
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Independent contractors often need to seek the help or expertise of other entities to complete a project. Sometimes, they need to act fast and might not have the time to create an agreement from scratch. That is why having a well-written template that covers all the bases can be beneficial.
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A Subcontractor Agreement can only be legally binding if both parties sign it. It's not necessary to notarize the agreement, and often the presence of a witness is sufficient.
To avoid any disputes and misunderstandings, read all the contract provisions carefully and negotiate the terms before signing.
Once signed, the Subcontractor Agreement is fully enforceable. It is not required to file the agreement with the court or any governing entity. However, both parties should keep a copy of the agreement on file in case they need it in the future.
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