General contractors often rely on subcontractors to complete specific parts of construction projects. A subcontractor may possess special skills and expertise that the contractor lacks, or may be able to complete the work cheaper and/or faster than the contractor could. When contractors hire subcontractors, the parties typically enter into a written contract. Subcontractor agreements specify the contractor-subcontractor relationship, including the duties and responsibilities of each party. Clear, comprehensive subcontractor agreements can prevent potential disputes. If you require assistance drafting or understanding a subcontractor agreement, or if you are currently involved in a construction dispute, an experienced Monmouth County business attorney can help.
Generally, a subcontractor agreement should address the following:
- Scope of work. The contract should clearly outline the specific work the subcontractor will perform as well as what standards that work must meet. Depending on the nature of the project and the client’s expectations, this section of the contract might include very specific details. For example, it might specify the use of particular paint brands or certain types of electrical wiring.
- Compensation. How and when the contractor will pay the subcontractor should be clearly defined, including the hourly rate or stipend amount.
- Project schedule. The agreement should make clear what obligations the subcontractor has as far as providing time estimates and completing work on schedule. It also should specify to what extent the subcontractor will be liable for damages caused by delays.
- Changes. It is usually best to require that any changes to the original contract occur in writing, especially changes involving scope of work or compensation.
- Bonding. The agreement should specify whether the contractor requires the subcontractor to be bonded.
- Liens. Many agreements include a provision that prevents the subcontractor from filing or retaining a mechanic’s lien after the contractor has paid the subcontractor in full. Some contracts even include a lien waiver provision that requires the subcontractor to waive his or her right to file a mechanic’s lien, which may or may not be enforceable depending on the laws in your state.
Additionally, most subcontractor agreements have provisions that cover: work or materials furnished by others, inspection and protection of work, use of equipment, contractor recourse, indemnification, insurance coverage and duty to comply with safety laws. An inadequate or poorly worded contract can lead to costly and time-consuming disputes. If you need help with a subcontractor agreement or resolving a construction dispute, contact a knowledgeable Monmouth County business lawyer today.