A subcontractor agreement is mostly about somebody else's contract.

The thing that makes a subcontract different is that it sits underneath a prime contract you may not have read. Terms flow down, payment often depends on a third party paying first, and the clauses that hurt are the ones imported by reference from a document you were never shown.

What goes wrong in this trade

Five things this document has to handle.

Flow-down by reference	"The Subcontractor is bound by all terms of the Prime Contract" imports obligations you have not read. Ask for the prime contract, or limit flow-down to named clauses.
Pay-when-paid versus pay-if-paid	Pay-when-paid delays your payment until the owner pays the general. Pay-if-paid can mean you are never paid if the owner defaults. The two words change who carries the credit risk.
Back-charges	Deductions for clean-up, delay or rework, applied unilaterally against your invoice. Require written notice and an opportunity to cure before any deduction.
Lien waivers	Signing an unconditional waiver before payment clears gives up your security for money you have not received. Conditional waivers exist for exactly this.
Retention	Commonly 5% to 10% held until completion or the end of the defects period. Know when it is released and what triggers it.

The clauses

What to put in, and what each one is for.

Scope by reference to drawings

Priced against named drawings at a named revision. Without the revision number, the scope moves when the drawings do.

Flow-down, limited

Name the prime contract clauses that apply rather than accepting all of them. Ask for a copy before signing.

Payment timing

Days after the general is paid, or days after invoice. Say which, and whether it is pay-when-paid or pay-if-paid.

Change orders

Written, priced before work starts, authorised by a named person. Verbal instructions on site are the most expensive habit in the trade.

Insurance and indemnity

Cover held, limits, additional insured status, and who indemnifies whom. Often a condition of being allowed on site.

Schedule and delay

Your dates, what they depend on, and what happens when the general's schedule slips.

Safety and site rules

Whose rules apply and who supplies what. Usually flows down.

Termination and suspension

Including what happens to work in progress and stored materials.

Commercial norms

How subcontracts are usually priced

Lump sum	Fixed for a defined scope. Needs tight drawings and a change order clause that works.
Unit rate	Priced per unit with measured quantities. Protects you when quantities are uncertain.
Time and materials	Usually for remedial or unknown work, often with a not-to-exceed figure.
Retention	5–10% held, released at completion or after the defects period.

Worth its own section

Insurance and licensing, before anything else

On most commercial sites you cannot start without certificates in place, and the general's requirements are usually stricter than the legal minimum. Check the required limits, whether the general must be named as additional insured, and whether waiver of subrogation is demanded. Get this settled before pricing, because the cover can change the number.

One sentence in

This much is enough.

Electrical subcontract for the Mill Lane fit-out, priced against drawings rev C, $42,000 lump sum, pay 30 days after invoice not pay-if-paid, 5% retention released at practical completion, conditional lien waivers only.

Out comes the agreement with the clauses above, the figures computed from your catalog, the signers set and the signature fields placed. Send it as a link and they sign on a phone on site. Once signed, the terms are read back so a renewal or a defects period does not surprise you.

Questions people actually ask

Straight answers.

What is flow-down in a subcontract?

A clause making the terms of the prime contract binding on you. It is standard and it is also how obligations you never read become yours. Ask for the prime contract, and where that is refused, limit flow-down to named clauses rather than accepting the whole document by reference.

What is the difference between pay-when-paid and pay-if-paid?

Pay-when-paid delays your payment until the general has been paid, which is a timing issue. Pay-if-paid makes the owner's payment a condition of yours, which means if the owner never pays you may never be paid. One word, and it decides who carries the credit risk on the project.

Should I sign a lien waiver before I am paid?

Not an unconditional one. A conditional waiver becomes effective when the payment clears, which is the point of the distinction. Signing unconditionally on the promise of payment gives up your security for money you do not have.

Can I generate one per job?

Yes, and with the line items priced from your own rate book rather than added up on site, which is where written-on-the-truck pricing usually goes wrong. Send it as a link and the general can sign on a phone.

General guidance for this trade, not legal advice. Requirements vary by state and by the work, particularly around licensing, insurance and lien rights. Have your standard agreement reviewed once by a lawyer who knows your jurisdiction, then produce every job from it.

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