Subcontracting Agreement

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What is it?

A Subcontracting Agreement is a legal document that you can use to set out the terms and conditions between a contractor and subcontractor for the provision of services to a third party.

Why do you need it?

There are many occasions when a business who is the supplier of goods or services under a contract does not supply all the goods or provide all the services for the project directly but engages a subcontractor to do so.

For example, a contractor may be engaged in a specific construction project. However, in order to complete that project the contractor may hire a subcontractor to do some or all of the work for the construction project.

Another example is where a software company (the contractor) enters into a specific contract to create a website and an app. The software company may focus on the software aspects of the project but may hire a subcontractor to perform other parts of this contract, such as the website design or graphics required for the website.

A Subcontracting Agreement specifies the terms of the relationship between the main contractor and the subcontractor.

Key clauses to watch for:

When drafting a Subcontracting Agreement, it is important to focus on a number of key clauses, in particular:

  • Details about the main contractor;
  • Details about the subcontractor;
  • If the main contractor has already entered into a main contract;
  • Who the contractor will be providing goods or services to;
  • Whether the subcontractor will be responsible for everything agreed in the main contract or only certain aspects;
  • Whether the subcontractor will indemnify the main contractor in respect of any work performed by the subcontractor; and
  • If there is any agreed limit of liability for both the contractor and the subcontractor.

This document is also sometimes called:

Independent Contractor Agreement and Subcontractor Agreement.

Subcontracting Agreement Document

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