What Does Subcontract Agreement Mean

Before proceeding to a discussion on the subject of subcontractors, it is important that you, the contractor, refer to your framework agreement (the agreement you have with a customer) to see if the framework agreement even allows the use of subcontractors. Sometimes the contract may prohibit the use altogether, while in other cases the prior consent of the customer is required before the subcontractors can be used. In a subcontract, the scope of work must always be determined. The scope of work is what a subcontractor is tasked with doing. A wide range of work is difficult to navigate and can be difficult for subcontractors to do. Since the work is not well defined, it is easier to say that the subcontractor did not do the right job for the project. Therefore, a clearly defined scope of work is crucial. Civil liability can also be an issue worth considering in a subcontract for plumbers, electricians, etc. Finally, some agreements will be of indefinite duration and will contain clauses relating to their termination. Check them for penalty clauses that might affect you. This can include late or non-payment from the end customer to the prime contractor, so this is an important aspect to consider. Of course, outsourced service providers should always check the scope of work.

And that the agreed payment terms and the price are correct. In addition, these agreements often include service level agreements. These usually cover things like how quickly you respond to service requests. Or how and where you provide services and within the time frame within which you need to complete your work. Again, these are just some of the most important clauses and considerations to consider when creating your subcontractor contract. The most important thing to remember is that you don`t want to compromise any of the promises you`ve made to your own customer by selling yourself to a subcontractor. Think ahead, plan ahead…

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