What is a subcontractor agreement?
A subcontractor agreement is a written contract between you and the subs you hire. It spells out what work gets done, when, for how much, and who's responsible if something goes wrong. This post covers what belongs in one and why you need it before work starts.
It's a legal protection, not just paperwork
A subcontractor agreement protects both sides by putting expectations in writing. Without one, you're relying on a phone conversation and a handshake. That creates disputes. A roofing contractor might think the sub is bringing their own scaffolding. The sub thinks you're providing it. Work stops. No one agreed in writing. With an agreement, you avoid that mess. It also protects you if a sub gets hurt on the job — the agreement should state they're responsible for their own insurance and workers' comp. If a sub damages someone's property, the agreement clarifies who pays.
What terms must be in the agreement
Your agreement needs to cover scope of work (exactly what gets done), timeline (start and end dates), payment amount and schedule, materials (who provides what), and insurance requirements. The scope matters most. Say you're a general contractor bringing in a framing sub on a residential project. The agreement should state: framing the first floor, supplying all lumber, cleanup included, done by December 15th, payment 50 percent when framed and in-the-dry, 50 percent after final inspection. It should also specify liability — does the sub carry their own general liability insurance. Required minimums vary by state and project type, but $1M is common. Include a clause about cleanup too. Most disputes happen because someone thought cleanup was included.
Who owns the agreement template
You can write one yourself, use a template from your industry association (AGC, NECA, or your state contractor board often have them), or hire a lawyer to write one for your business. Don't use a template meant for an entirely different trade — a plumbing sub agreement doesn't fit a concrete job. Templates from your state's contractor board are usually solid because they account for local labor laws. If you hire a lawyer, budget 500 to 1500 dollars to get a template done right. You'll use it fifty times over. It's worth it.
Keep signed copies and send it before work starts
Get the sub to sign it before they show up. Not after, not verbally. Send it with your scope. Give them time to read it and ask questions. If they won't sign something reasonable, that's a red flag. Keep a signed copy in your records. If you're managing multiple subs, track which ones have signed agreements for which jobs. This matters if a claim comes up later — you need proof of what was agreed. You can track this in a spreadsheet, or if you're using job management software, attach the signed agreement to each job. Either way, don't rely on memory.
Bottom line
Write or get a template, customize it for your trade, and have every sub sign one before they start work. It prevents payment disputes, clarifies liability, and protects you legally.