A Subcontractor Agreement is a legal contract that allows a primary contractor to outsource part of their obligations to another individual or company, known as a subcontractor. Whether you're delivering a large construction project or a complex IT solution, a subcontractor agreement ensures that everyone involved understands their responsibilities, deadlines, and payment terms.

This agreement is vital in managing large or specialised projects where one contractor can't (or shouldn’t) complete all tasks alone. By bringing in subcontractors under a clearly defined contract, the main contractor ensures high-quality delivery while reducing risk and maintaining control.

What is a Subcontractor Agreement?

A Subcontractor Agreement outlines the terms under which a contractor hires a third party to carry out specific parts of a larger contract. It identifies the scope of work, payment structure, responsibilities, and legal obligations of both parties.

These agreements are widely used in industries like construction, IT services, engineering, and consulting. They serve as a formal foundation for the relationship between the contractor and subcontractor, keeping both aligned with the expectations of the original client contract.

Benefits of using a Subcontractor Agreement

Using a subcontractor agreement protects both the contractor and the subcontractor by:

• Clearly defining roles, this ensures that everyone knows who is responsible for what.
• Reducing legal risk, a subcontractor agreement minimises the chance of disputes or claims from missed deadlines or defective work.
• Protecting intellectual property and confidential information, this is particularly important in professional services and product development.
• Enabling smooth project delivery, by agreeing to timelines, access to resources, and dispute resolution clauses.

Whether you are a contractor expanding your team or a subcontractor looking to safeguard your work, this document helps set expectations and reduce the risk of misunderstandings.

How to create a Subcontractor Agreement

Creating a Subcontractor Agreement is fast and easy with Bind. Simply enter a few details, such as the parties involved (business or private individual), project description, subcontracted services, deadlines, payment terms, and location of work.

Bind will automatically generate a tailored, high-quality contract. You can then sign it digitally and share it with the other party—all from one place. Edits can also be made manually or with help from Bind’s AI editor.

What does a Subcontractor Agreement include?

A standard Subcontractor Agreement typically contains the following key sections:

• Scope of Services
• Term
• Compensation
• Obligations of the Parties
• Confidentiality
• Indemnity
• Insurance (optional but recommended)
• Termination
• Dispute Resolution
• Governing Law and Jurisdiction

Common questions about Subcontractor Agreements

Is a subcontractor agreement legally binding?
Yes. Once signed by both parties, it is a binding contract and enforceable in court, assuming it contains the key elements of a valid contract.

Can a subcontractor hire their own subcontractors?
Only if the agreement allows it. Some agreements restrict subcontracting to ensure quality and control over the work.

Does the contractor remain responsible for the entire project?
Yes. Even if work is delegated to a subcontractor, the main contractor remains accountable to the original client.

Can a subcontractor be held liable for project delays?
Yes, if delays are due to their failure to perform. The agreement should address timelines and what happens in case of missed deadlines.

What happens if you don’t have a Subcontractor Agreement?

Without a subcontractor agreement, roles and responsibilities may be unclear. This can result in:

• Unpaid work or payment disputes
• Poor quality or delayed results
• Unresolved liability issues in case of injury, damage, or legal claims
• Loss of confidential data or intellectual property

A written agreement avoids misunderstandings and gives both parties peace of mind.

Subcontractor Agreement – Free Template

This Subcontractor Agreement (the “Agreement”) is made and entered into by and between:

(1) Contractor Name, of Contractor Address (“Contractor”); and  
(2) Subcontractor Name, of Subcontractor Address (“Subcontractor”).

RECITALS

WHEREAS, the Contractor has entered into a contract with a client for [Project Description];  
WHEREAS, the Contractor wishes to subcontract certain services to the Subcontractor;  
NOW, THEREFORE, the parties agree as follows:

1. Scope of Services
The Subcontractor agrees to perform the following services:  
- [Detailed list of services, tasks, and deadlines]

2. Term
This Agreement shall commence on [Start Date] and continue until completion of the Services, unless terminated earlier.

3. Compensation
The Contractor shall pay the Subcontractor £[Amount] in total, to be paid via [payment method] in [lump sum or instalments – specify terms and dates].

4. Obligations of the Parties
Each party agrees to perform their obligations as described in this Agreement, including providing necessary information, materials, access, and compliance with laws.

5. Confidentiality
Both parties shall keep all proprietary and confidential information private, during and after the term of this Agreement.

6. Indemnity
Each party agrees to indemnify the other against claims arising from their respective performance or failure under this Agreement.

7. Insurance  
The Subcontractor shall maintain appropriate insurance, including general liability and workers’ compensation, and shall provide proof upon request.

8. Termination
Either party may terminate this Agreement by providing [Number] days’ written notice, or immediately upon material breach or insolvency.

9. Dispute Resolution
Disputes shall be resolved through good-faith negotiation, and if unresolved, through arbitration conducted in English.

10. General Provisions
This Agreement constitutes the entire agreement between the parties. It may only be amended in writing and signed by both parties. Notices may be sent by post or email.

11. Governing Law and Jurisdiction
This Agreement is governed by the laws of [Country]. Any disputes shall be resolved in the courts of [City, Country].

Signatures
This Agreement is signed with e-sign.

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Bind is the easiest way to quickly and accurately create up-to-date contracts and documents from start to finish. You can generate your Subcontractor Agreement using Bind, sign it online, and manage everything in one secure place.