How to Write a Subcontractor Agreement
A clear subcontractor agreement is what turns a handshake into something a lawyer (or a court) can enforce. Even on a one-day job, having an agreement signed beats a verbal understanding when something goes wrong.
Required sections
- Parties and project — full legal names, project address, project description
- Scope of work — specific deliverables, materials, what's NOT included (exclusions)
- Schedule — start and substantial completion dates, milestones
- Compensation — total price, payment milestones, retainage if any
- Insurance — required GL, workers' comp, Additional Insured status
- Indemnification — sub indemnifies GC for sub's own work
- Change orders — no work on changes without signed change order
- Termination — what happens if either party walks
- Dispute resolution — mediation/arbitration clauses if desired
- Lien waivers — sub provides waivers matching each payment
Things to avoid
Open-ended scope ('and all related work') invites scope creep. Vague payment terms ('upon satisfactory completion') invite disputes. Missing indemnification language puts you on the hook for the sub's mistakes.
Get it reviewed once
A construction-savvy attorney can produce a template you'll use for years for $500-1,500. Worth it for any contractor running more than a few subs per year.
Frequently asked questions
Can I use a template subcontractor agreement?
Yes, but have a construction attorney review it once for your state and trade. Templates miss state-specific requirements that can void clauses.
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