hardhatU
Concept

Subcontract Agreement

The contract between a general contractor and a subcontractor defining that subcontractor's specific scope, price, and schedule, typically written to "flow down" many of the same obligations the GC agreed to in the [[concept-prime-contract|prime contract]] with the owner.

Why it matters

A subcontractor's actual legal rights and obligations depend entirely on what their specific subcontract agreement says, not on what the prime contract between the owner and GC says on its own: if a key prime contract term never gets written into the subcontract, it usually doesn't bind the subcontractor at all.

On a real project

A general contractor's subcontract agreement with an electrical subcontractor spells out that subcontractor's specific scope of work, price, schedule milestones, and a flow-down clause incorporating the relevant terms of the prime contract.

Who this matters most to

A Contracts Administrator drafts subcontract agreements for every trade on a project, tailoring the flow-down language and scope to each one. A Project Manager manages subcontractor performance and payment against the specific terms each subcontract agreement actually sets.

Where this goes wrong

A general contractor uses a generic subcontract template for a specialty trade without customizing the scope language to that trade's actual work. A dispute arises over whether a specific task was included, and the vague, generic scope language in the subcontract agreement doesn't clearly answer the question either way.