In the most basic terms, a subcontractor agreement is an agreement that specifies the terms between a contractor and a subcontractor. This will include the type of work that is being performed. But it’s not quite as simple as it sounds. While some contractors prefer to use generic, standard legal forms, others prefer to work alongside an attorney. They can help draft the agreement depending on the specific needs of both parties.

When a contractor is first hired for a project, they are known as the prime contractor. The responsibility for the work is down to this prime contractor, despite the option of hiring subcontractors to perform some of the work. For example, if the prime contractor is working on a construction project they may lack the abilities involved with carpentry, despite being trained in house building. They would then hire a carpenter to complete the jobs they couldn’t do themselves.

The subcontractor agreement specifies the type of work, standards of work and the timeframe which the job is needed to be completed in. Compensation is also included and can be hourly, or a set limit, depending on the subcontractor. Contractors create these agreements as they are liable for the work of others. Subcontractors also need legal protection concerning health and safety.

At Winflow Financial Group, our consultants help entrepreneurs with our experience. Tell us about your business or investment today and find out how we can help your business save money and grow.