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If your company is looking to take on subcontractors, it's always a smart idea to look after your interests before you enter into a contract. Here's how to put together a subcontractor agreement so that everyone knows where they stand from both a practical and a legal viewpoint.
What is a subcontractor agreement?
A subcontractor agreement can be used to set out the terms and conditions between a company (the contractor) and a service provider (the subcontractor). It is a legal contract that protects both parties involved by detailing the services and the conditions of the agreement. A subcontractor is not an employee and typically only works for a set period of time.
Download this template at Lawpath
When should I use a subcontractor agreement?
A subcontractor agreement can be used when a company, or contractor, hires a service provider, or subcontractor, to carry out a task. Companies often choose to hire subcontractors instead of onboarding new staff if they require a specialist skill, or need work completed on a short-term basis. All parties involved should agree upon and sign an agreement before any work starts.
Subcontractor agreement vs Contractor agreement
In this case, both a subcontractor agreement and a contractor agreement will include similar clauses. Both will outline the terms and conditions for the provision of the services.
The difference between the two agreements is simply to do with the people they involve. While a contractor will normally deal directly with a client or business, a subcontractor is often employed by the contractor themselves.
What does a subcontractor agreement include and not include?
A subcontractor agreement usually includes the following:
- Description of the services that a subcontractor will provide
- The standard of work expected throughout the project and any agreed warranties
- Duration of the working relationship
- Health and safety whilst on the job
- Insurance requirements such as public liability cover.
- Relevant payment and billing details
- Grounds for termination of the contract
- Dispute management and resolution
- A confidentiality clause to protect any private information shared
- Ownership of intellectual property created during the project.
Typically not included
Subcontractors are self-employed, so you don't need to include any benefits such as health care and sick pay in the agreement. You should also avoid promising to provide training or materials as subcontractors are fully trained professionals and should have their own equipment.
How effective is a subcontractor agreement?
A subcontractor agreement is a legally binding contract that will hold up in an Australian court of law. As well as protecting both parties involved, the agreement also makes sure everyone knows where they stand in the relationship and what is expected of them. Putting together a well-written agreement can make the process run a lot smoother from start to finish.
Do I need to use a lawyer?
As is the case with most legally-binding agreements, it's a good idea to seek the help of a legal professional. As a multi-page document, this type of agreement can get complicated, and it's important not to miss anything out. To get you off on the right foot, you can also use a subcontractor agreement template and then share your document with a legal professional once it's been drafted.
Access customisable subcontractor agreement templates online
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How do I write a subcontractor agreement?
Before you start to write your agreement, it's important for both parties to sit down and agree upon the terms and conditions. This will save you from having to edit the document later on. Once you have gathered all of the relevant information, it's time to start writing up the document. You should write the agreement using clear and concise language that both parties can understand. This is crucial to avoid any ambiguity in the future.
More information on free legal services online
If you want to get a better idea of what to include in your agreement, or need help with writing one straight away – here are some options to consider:
- Lawpath. You can sign up to Lawpath's monthly subscription service for unlimited access to legal templates or purchase a specific document for a one-time fee.
- Legal Vision. Designed with small businesses in mind, Legal Vision offers a monthly subscription service that will give you unlimited access to thousands of legal templates.
- Easy Legal Templates. A helpful online resource that will walk you through writing a document and supply you with a subcontractor agreement template.
- Wonder.Legal. Find more than 140 legal templates to purchase for a one-time fee on Wonder.Legal.
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