60%+ of GC–sub disputes involve scope ambiguity, undefined payment terms, or missing insurance requirements — all preventable with a written agreement (ASA, 2024).
Key Takeaways
Include sub's license number — contracting with an unlicensed sub can void your insurance and expose you to liability.
Attach the full scope as Exhibit A. Body of agreement just references it:
"Subcontractor shall complete the Work described in Exhibit A. Work not in Exhibit A requires a written change order."
See our construction scope of work template.
Subcontract Price: $___________
Payment Schedule:
Mobilization: $_____ (upon execution)
Progress Payment #1: $_____ (upon: _________)
Progress Payment #2: $_____ (upon: _________)
Final Payment: $_____ (upon acceptance)
Timing: 10 days after Contractor receives Owner payment.
Retainage: 10% withheld; released with final payment.
Pay-when-paid vs. pay-if-paid: Pay-when-paid passes timing risk to the sub; pay-if-paid passes non-payment risk. Pay-if-paid is void in many states (CA, NY, others) — check your state before including it.
Start/completion dates, coordination with master schedule, time is of the essence. Sub not liable for delays caused by GC, owner, or force majeure.
"All scope changes require a written, signed change order before work proceeds. Verbal authorizations are not valid."
See our construction change order template.
Commercial General Liability:
Per occurrence: $1,000,000 | Aggregate: $2,000,000
[GC name] named as Additional Insured ← required
Workers' Compensation: Statutory limits
Employer's Liability: $500,000/accident
Commercial Auto: $1,000,000 CSL
Certificates required before mobilizing.
Sub indemnifies GC for claims arising from sub's negligent acts — excluding claims caused by GC's sole negligence. (Most states prohibit requiring a sub to cover the GC's own negligence.)
See our construction lien waiver template.
1-year workmanship warranty from substantial completion. Defects corrected within 10 business days at no cost. If sub fails to correct, GC may back-charge.
Sub is bound by all applicable prime contract terms. No direct claim against owner. GC's rights against sub are no less than owner's rights against GC for the same matter.
SUBCONTRACTOR AGREEMENT
Date: _______________________
Project: _____________________ Address: ___________________
Prime Contract Ref: __________
CONTRACTOR: ____________________ License #: ________
SUBCONTRACTOR: _________________ License #: ________
─────────────────────────────────────────────────────────
Per Exhibit A. All changes require written change order.
Subcontract Price: $___________
Mobilization: $_____ upon execution
Progress #1: $_____ upon _______________
Progress #2: $_____ upon _______________
Final: $_____ upon acceptance + final lien waiver
Payment: 10 days after GC receives Owner payment.
Retainage: 10%; released with final payment.
Start: ___________ Completion: ___________
Time is of the essence.
Written + signed before work proceeds. Cost plus [___]%.
CGL: $1M/$2M — GC named Additional Insured
Workers' Comp: statutory | Auto: $1M CSL
Sub indemnifies GC for sub's negligent acts; excludes GC's
sole negligence.
Conditional with each pay app. Unconditional within 10 days
of payment. Final waivers at project close.
1 year from substantial completion. Defects corrected within
10 business days at no cost to GC.
Sub bound by applicable prime contract terms. No direct
claim against Owner.
10. TERMINATION
For cause: 10 days' notice; pay completed work only.
For convenience: 7 days' notice; pay completed work +
non-returnable materials + demobilization.
11. GOVERNING LAW: [State]. Disputes: mediation before litigation.
EXHIBITS: A — Scope of Work | B — Schedule | C — Insurance
─────────────────────────────────────────────────────────
Contractor: ___________________________ Date: __________
Subcontractor: ________________________ Date: __________
[ ] Certificate of Insurance received
[ ] CGL per occurrence $1M minimum ✓
[ ] CGL aggregate $2M minimum ✓
[ ] GC named as Additional Insured ✓
[ ] Workers' Comp — statutory limits ✓
[ ] Auto — $1M CSL ✓
[ ] Policies don't expire mid-project ✓
[ ] Carrier AM Best A-VII or better ✓
Do not allow mobilization without verified certificate.
Relevant Article:Pressure Washing Contracts Template: A Practical, Copy‑Paste Agreement (With Clauses That Prevent Disputes)
Electrical / plumbing: Sub pulls permits, schedules inspections. Work not covered until inspected and approved.
Roofing: 10-year workmanship warranty; completed operations coverage for 3 years post-completion.
Concrete / foundation: Compaction test reports required. Work not proceeding to next phase without GC approval of test results.
T&M subs: Daily T&M tickets signed by GC field supervisor. Uncovered tickets not compensated.
Sources: American Subcontractors Association 2024 · AGC Subcontracting Best Practices 2024 · ConsensusDocs 750