Subcontractor Agreements - Why Subcontractor Agreements are Essential

Published: 11th December 2009
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A Subcontractor Agreement or Subcontract Agreement is a binding document allowing a Contractor to engage another contractor ("sub") to do a piece of the job the Contractor originally agreed to perform. This sub-contractor agreement is normally abused once a Contractor has already signed a contract with someone else.

Subcontractor Agreements are a very popular type of building agreement. It is important for both parties to use a effectively written legal agreement which drafts the scope of work, fixes fees and payment, and leaves remedy for non-payment and incomplete work.

A subcontractor (or "sub") is the individual or business organization that promises to assume part or all of the duties of someone else's original contract. The subcontractor is employed by a general contractor to do specified work as a part of the overall job. The sub contract agreement in general provides for a specified portion of a contracted job.

Contractors take on sub contractors as a way to tighten job costs or to mitigate project risks. This way the customer is provided greater service than could have been supplied by the general, with lighter overall risk. Many subcontractors are extremely expert specialists, and often will joint venture with just a single construction company. Subcontract Agreements allow contractors wider subcontractor management tools.

Setting Up A Subcontractor Agreement

Before participating in a Subcontractor Agreement, you will be required to make some decisions and take some particular actions. There are a few great guidelines to help contractors get the most out of hiring a subcontractor.

To start with, you need to define the range of the work you want to have the subcontractor complete. For example, if the job requires drywalling with tile over it, you will need two separate subcontractors. Every task will require its own separate agreement. You can always have the same subcontractor execute both jobs, but you will need a separate subcontractor contract to specify each job.

Generate a detailed job description. Include drawings as necessary and a thorough listing of the work to be finished. Be throrough with the description to avoid problems.
Call for as many bids as you can get. Get hold of subs you already know and work with, or you can advertise, or both, just to maximize your chances. Make sure you give each future subcontractor a copy of the detailed job description plus drawings you created. That manner they can give you their truly best bid.

Select your sub on the quality of his work, not just price alone. If you choose a subcontracting company that does inferior work, you won't be getting such a great bargain after all. Do your proper due dilligence - get references and follow them up. Call the subcontractor's customers and ask them not only about their overall satisfaction, but about specificsfor example, was the sub polite, did he clean up, did he finish on time, and so forth. Ask to see a valid insurance certificate. To mitigate risk, ensure the sub is properly covered. The sub should be able to have his insurer provide you with a copy of his policy.

Subcontractor Agreements Are Your Friend - Always Use Them

You can give better service and add value by using subcontractors. A solid Subcontractor Agreement will ensure that both you and your sub are properly protected.

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