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Construction Law

Why Every Contractor Needs a Well-Written Subcontract Agreement

By May 1, 2025No Comments

Video Transcription

I wanted to talk a little bit today about subcontract agreements. We found that for a lot of our trade contractors, construction agreements are becoming more and more complex as the years go on.

The general purpose of a subcontract agreement is to allocate the risks and obligations amongst the parties. What we see most often for disputes are simple things like payments and extras and change orders. A subcontract agreement with clearly defined current terms can help minimize those disputes by setting forth exactly what someone’s going to get paid and what the scope of the work can be. If a dispute does arise, the subcontract agreement also allows the parties to set forth how they’re going to resolve disputes, whether that’s by arbitration or litigation or even meeting in advance and having a mediation.

The main point, though, is to have your subcontract agreements reviewed early and often to make sure that you’re complying with laws and updates that happen every year, but also to make sure that you’re aware of the risks and obligations of your contract so that you can bid on your projects according to those risks and obligations.

Lanak & Hanna
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