Why do you use a subcontracting agreement?

A subcontracting agreement sets out the arrangements between the main contractor and the subcontractor: which work, for what payment, within what timeframe, and with what distribution of liability. Such a contract prevents disputes and can be decisive in insurance matters. Below, you can read what a subcontracting agreement is, why you need one, and what to look out for.

What is a subcontracting agreement?

Subcontracting is the outsourcing of work by a main contractor to another party: the subcontractor. A subcontracting agreement is the contract between the two, in which the key agreements are laid down, such as:

• the exact work performed by the subcontractor;
• the payment for those activities;
• the responsibilities of both parties.

The goal is for both parties to know exactly what is expected of them.

Why do you need a subcontracting agreement?

In addition to agreements regarding execution and payment, you can include much more in the agreement, such as:

• the period within which the work must be completed;
• the liability of the parties;
• the consequences of force majeure, delays or other problems;
• agreements regarding confidential information and intellectual property.

These agreements prevent many problems. Moreover, the agreement can be important regarding insurance matters: by using a subcontracting agreement, you increase the likelihood that the subcontractor's liability insurance will provide coverage for any consequential damage. In this way, the main contractor avoids unwanted claims on their own insurance, which could otherwise, for example, increase the premium.

Drafting or reviewing: have it done by a specialist

Drafting or reviewing a subcontracting agreement is specialist work and requires knowledge of contract law and construction contracts.

• As the main contractor: have a lawyer draft the agreement to ensure it is complete and contains all important agreements and conditions.
• As a subcontractor: have a presented agreement checked so that you do not agree to disadvantageous or unreasonable terms — or to agreements that violate the law.

Frequently Asked Questions

What is included in a subcontracting agreement?

Including, among other things, the activities, payment, the term, liability, the consequences of force majeure and delay, and agreements regarding confidentiality and intellectual property.

Why is the agreement important for my insurance?

A good subcontracting agreement increases the likelihood that consequential damage is covered by the subcontractor's insurance, so that the main contractor does not incur an unwanted claims burden on their own policy.

As a subcontractor, am I required to simply sign a presented contract?

Better not. Have it checked first; such contracts are often in favor of the main contractor and may contain unreasonable or even invalid provisions.

What is the difference compared to a standard construction contract?

A contract for services is the agreement with the client; a subcontracting agreement governs the relationship between the main contractor and the subcontractor for (a part of) that same work.

Drafting or reviewing a subcontracting agreement?

We have extensive experience in contracting work and ensure that your subcontracting agreement meets legal requirements and aligns with your practical needs — whether you are a main contractor or a subcontractor.

View our subcontracting agreement or schedule a no-obligation intake meeting.