Subcontractor Agreement

Subcontractor Agreement: a practical guide

A Subcontractor Agreement records the terms for work that a Subcontractor performs for a Contractor as part of a larger project or service. It helps both sides describe the work, payment, timing, and handling of work product before the subcontractor starts.

What it's for

Use this agreement when a person or business hires another person or business to complete part of a project, provide specialist services, or help deliver work for a customer. It gives the two sides a shared written reference for what the subcontractor will do and what the contractor will provide or pay.

A subcontractor may work behind the scenes, deal directly with the contractor’s customer, or deliver a defined part of the project. State which arrangement applies, who gives instructions, and who can approve changes. If the work relates to another contract, identify the relevant requirements clearly instead of assuming the subcontractor has agreed to terms they have not seen.

A different document may fit better when the relationship is directly between a business and its end customer, or when the parties need a broader framework for repeated services with separate work orders. A master service agreement or a scope of work may help with those arrangements; the choice depends on what the parties need to record.

Who uses it

• A contractor hiring a specialist to complete one part of a customer project.
• A design, construction, consulting, or other service business bringing in temporary project support.
• A company outsourcing a defined task to an independent professional or small business.
• A subcontractor who wants the agreed work, fee, delivery expectations, and work product terms recorded.
• A project team that needs to set out how the subcontractor will coordinate with the contractor or other workers.

Terms to decide on

Scope and deliverables

Describe each task, item, or service the subcontractor must provide, including any agreed format or quality requirements. State what is outside the scope and how either side can request or approve a change.

Roles and coordination

Say who will give instructions, provide materials or access, answer questions, and approve completed work. If the subcontractor will contact the contractor’s customer or other project participants, describe the limits and communication process.

Fee and expenses

Set out the agreed total fee or rate, how work time or milestones will be measured, and what expenses may be reimbursed. Explain how and when invoices are submitted and what information they should include.

Schedule and delivery

Identify the expected start, milestones, and completion or delivery date. Note any contractor inputs or approvals that the schedule depends on, and how the parties will handle a likely delay.

Review, changes, and corrections

Explain how the contractor will review a deliverable, report a problem, or ask for a correction. Define what counts as work within the original scope and how additional work will be priced and scheduled.

Work product and materials

State who may use or own the completed work, when any transfer or permission takes effect, and whether the subcontractor may reuse pre-existing tools or materials. Address any third-party content or materials the work may include.

Confidential information and access

Describe information the subcontractor should keep private and any limits on using project files, accounts, equipment, or customer information. Include practical steps for returning or removing access when the work ends.

Ending the arrangement

Say how either side may end the work, what happens to unfinished tasks and completed deliverables, and how the parties will account for fees and expenses up to that point. Check local rules about notice or required wording where they apply.

Common mistakes

• Using a broad label such as “marketing support” without listing the actual tasks, expected outputs, or excluded work.
• Leaving out who supplies files, equipment, access, or approvals, then treating resulting delays as the other side’s responsibility.
• Describing a fee but not saying how hours, milestones, expenses, invoices, or extra requests will be handled.
• Assuming the subcontractor has accepted requirements from the contractor’s separate customer contract without providing or identifying those requirements.
• Saying that all work belongs to one side without addressing pre-existing tools, reusable materials, or third-party content.
• Allowing direct contact with the end customer without saying who can give instructions, approve changes, or make commitments.
• Copying a template term that conflicts with the agreed scope, payment process, or project schedule.

Before you sign

• Check that the correct people or businesses are named and that each signer has authority to sign for their side.
• Read the scope and deliverables as a practical task list, and clarify anything either side could interpret differently.
• Confirm that the fee, invoice process, expense treatment, schedule, and approval steps match what both sides discussed.
• Review any separate customer or project requirements that the subcontractor is expected to follow, and identify them clearly.
• Agree on how pre-existing materials, completed work, confidential information, and project access will be handled.
• Check the rules where the document will be used, including any local requirements for signing, witnesses, notarization, registration, notice periods, or required wording; ask a qualified lawyer when a lot is at stake.
• Make sure all agreed changes are included before each side signs and keeps a copy.