Do I need a written subcontractor agreement for a small job?

Yes. The dollar value does not change the exposure — an uninsured injury or an unpaid supplier lien on a $6,000 job produces the same claim as on a $600,000 one.

Can I use this template as-is?

No. Use it to understand the structure and to prepare for a review. Indemnification, payment timing, lien and termination clauses are state-specific and need a local construction lawyer's eyes before you sign anything.

What insurance should I require from a subcontractor?

General liability, auto liability and workers' compensation at minimum, with the general contractor and owner as additional insureds, primary and non-contributory. Verify the actual endorsements and the expiry dates, not just the certificate.

What is the difference between pay-when-paid and pay-if-paid?

Pay-when-paid delays payment until the owner pays, but the sub is eventually paid regardless. Pay-if-paid makes owner payment a genuine condition of any payment at all, and it is unenforceable in several states.

Does a subcontractor need to be licensed?

In most states, for most trades, yes — and using an unlicensed sub can expose the general contractor to penalties and can affect the enforceability of the contract. Record and verify the licence number.

Who is responsible if a subcontractor's work is defective?

To the owner, the general contractor is responsible under the prime contract. The sub's warranty and indemnity clauses are what allow the general contractor to pass that cost back, which is why they need to be written properly.

Subcontractor Agreement Template

This is the structure of a subcontract — scope, payment terms, insurance requirements, indemnification, lien waivers, safety and termination — written out in full so you can see what each clause is for. It is a starting point for a conversation with a lawyer, not a document to sign as-is.

Last reviewed 9 Sept 2026

Before you use this: This is a starting structure, not legal advice. Subcontract law varies by state, and clauses covering indemnification, lien rights, pay-when-paid and termination are exactly the ones that are limited or unenforceable in some jurisdictions. Have a construction lawyer in your state review anything you actually intend to sign.

Free to use. No email, no sign-up. Paste it into Word, Google Docs or an email and replace anything in [BRACKETS].

Subcontractor Agreement

Parties and project

Agreement date: [DATE]
Contractor: [CONTRACTOR NAME, ENTITY TYPE, ADDRESS]
Contractor license no.: [LICENSE NO.]
Subcontractor: [SUBCONTRACTOR NAME, ENTITY TYPE, ADDRESS]
Subcontractor license no.: [LICENSE NO.]
Project: [PROJECT NAME AND ADDRESS]
Prime contract with: [OWNER NAME, DATED [DATE]]

1. Scope of work

Subcontractor shall furnish all labor, materials, tools, equipment, supervision and services necessary to complete the following work:

[DESCRIBE THE WORK IN DETAIL — TRADE, LOCATIONS, QUANTITIES, SPECIFICATIONS AND DRAWING REFERENCES]

Expressly excluded from this scope: [LIST EXCLUSIONS — WHO PROVIDES DUMPSTERS, HOISTING, TEMPORARY POWER, LAYOUT, PATCHING, FINAL CLEANING].

Subcontractor has reviewed the plans, specifications and site conditions and accepts the scope as sufficient to complete the work in a workmanlike manner and in compliance with all applicable codes.

2. Contract price and payment

Subcontract sum: [$0.00]
Basis: [LUMP SUM / UNIT PRICE / TIME AND MATERIALS AT $[RATE]]
Invoices due by: [DAY OF MONTH]
Payment within: [XX DAYS OF APPROVED INVOICE]
Retainage: [__% RELEASED AT [MILESTONE]]


Each payment application shall be accompanied by conditional lien waivers from Subcontractor and from every lower-tier sub and supplier for the amount then being billed, and by unconditional waivers for all amounts previously paid.

[SELECT ONE — AND CHECK WHETHER IT IS ENFORCEABLE IN YOUR STATE]
[ ] Payment to Subcontractor is due within [XX] days of Contractor's receipt of payment from Owner for the work in question (pay-when-paid — a timing term only).
[ ] Payment to Subcontractor is due within [XX] days of approved invoice regardless of Owner payment.

3. Schedule

Start date: [DATE]. Substantial completion of Subcontractor's work: [DATE].

Subcontractor shall provide sufficient manpower to maintain the Contractor's schedule as updated from time to time, shall attend scheduling meetings on reasonable notice, and shall give written notice within [3] days of any event Subcontractor believes entitles it to additional time.

Liquidated or actual damages for delay: [STATE THE AMOUNT PER DAY OR 'NONE'].

4. Changes

No change to the scope, price or schedule is authorised unless issued as a written change order signed by both parties before the work is performed. Subcontractor performing extra work without a signed change order does so at its own cost.

5. Insurance

Do not let a sub start without certificates in hand. This is where a general contractor's exposure actually lives.


Subcontractor shall name Contractor and Owner as additional insureds on a primary and non-contributory basis, shall provide a waiver of subrogation in Contractor's favour where permitted, and shall deliver certificates and additional-insured endorsements before mobilising. Coverage shall be maintained through completion and, for products-completed operations, for [X] years after final completion.

Coverage	Minimum limit	Notes
Commercial general liability	$[1,000,000] per occurrence / $[2,000,000] aggregate	Occurrence form, products-completed operations included
Automobile liability	$[1,000,000] combined single limit	Owned, hired and non-owned
Workers' compensation	Statutory	Employer's liability $[1,000,000]
Umbrella / excess	$[1,000,000]	If required by the prime contract

6. Indemnification

To the fullest extent permitted by law, Subcontractor shall indemnify, defend and hold harmless Contractor and Owner from claims, damages, losses and expenses, including reasonable attorneys' fees, arising out of or resulting from performance of Subcontractor's work, but only to the extent caused by the negligent acts or omissions of Subcontractor, its lower-tier subs, suppliers or anyone for whose acts they are liable.

[NOTE: Many states restrict or void indemnity clauses that cover the indemnitee's own negligence. Anti-indemnity statutes differ substantially. Have this clause reviewed locally.]

7. Lien waivers

Subcontractor waives no lien rights except as exchanged for payment. Subcontractor shall deliver, in the statutory form of the state where the project is located:

- a conditional waiver on progress payment with each payment application;
- an unconditional waiver on progress payment for each amount actually received;
- a conditional waiver on final payment with the final application;
- an unconditional waiver on final payment, together with waivers from all lower-tier subs and suppliers, upon receipt of final payment.

Subcontractor shall promptly discharge or bond around any lien filed by a lower-tier sub or supplier arising from amounts Contractor has already paid Subcontractor.

8. Safety and site conduct

Subcontractor is responsible for the safety of its own employees and operations and shall comply with OSHA and all applicable safety requirements, the Owner's site rules and Contractor's site-specific safety plan.

Subcontractor shall: designate a competent person on site; provide and enforce personal protective equipment; furnish safety data sheets for materials brought to site; report any recordable injury or near-miss to Contractor within 24 hours; and keep its work area clean daily.

Contractor may remove from the site any person whose conduct is unsafe. Fines or penalties assessed against Contractor arising from Subcontractor's violations are chargeable to Subcontractor.

9. Warranty

Subcontractor warrants its work against defects in materials and workmanship for [1] year from substantial completion of the project, or the period required by the prime contract if longer, and shall correct defective work at its own expense within [10] days of written notice. Manufacturer warranties are assigned to Owner at completion.

10. Independent contractor status

Subcontractor is an independent contractor. Nothing in this agreement creates an employment, partnership or joint venture relationship. Subcontractor is solely responsible for its own employees, payroll taxes, benefits and workers' compensation.

11. Termination and suspension

Contractor may terminate for cause on [3] days' written notice if Subcontractor fails to supply enough properly skilled workers or materials, fails to make payment to its own subs or suppliers, disregards laws or codes, or is otherwise in material breach and has not cured within the notice period.

Contractor may terminate or suspend for convenience on [7] days' written notice, in which case Subcontractor is paid for work properly performed to the date of termination plus reasonable demobilisation costs, and no lost profit on unperformed work.

12. Dispute resolution and general terms

Governing law: [STATE].
Disputes shall first be submitted to [MEDIATION / DIRECT NEGOTIATION BETWEEN PRINCIPALS] before [LITIGATION / BINDING ARBITRATION] in [COUNTY, STATE].

This agreement, together with the documents incorporated by reference, is the entire agreement between the parties and supersedes all prior discussions. It may be amended only in writing signed by both parties. If any provision is held unenforceable, the remainder stays in effect.

Documents incorporated by reference: [PLANS DATED __, SPECIFICATIONS DATED __, PRIME CONTRACT, PROJECT SCHEDULE, SITE SAFETY PLAN].

Signatures

CONTRACTOR
By: ___________________________  Date: ____________
Printed name / title: [NAME, TITLE]

SUBCONTRACTOR
By: ___________________________  Date: ____________
Printed name / title: [NAME, TITLE]

Free to use. No email, no sign-up. Paste it into Word, Google Docs or an email and replace anything in [BRACKETS].

How to use this template

Read this first: what this document is and is not

This is a structure. It shows you which clauses belong in a subcontract, in the order they normally appear, with plain language explaining what each one is doing. That is genuinely useful — it means you can read a subcontract someone hands you and know what is missing, and you can brief a lawyer efficiently instead of paying them to explain the basics.

It is not legal advice and it is not ready to sign. Subcontract law is state law, and the clauses that matter most are exactly the ones that vary: anti-indemnity statutes, pay-when-paid and pay-if-paid enforceability, lien waiver forms, prompt payment acts, and limits on what a residential contract may contain. A clause that is standard in Texas can be void in California.

Spend the few hundred dollars. A construction lawyer reviewing a subcontract you will use repeatedly is one of the cheapest things you will buy all year, and a template found online and signed unread is one of the most expensive.

Scope is where subcontracts fail

Not the legal clauses — the scope. Nearly every subcontract dispute is a boundary dispute about who was supposed to do a small thing that both parties assumed was the other's.

Who provides the dumpster. Who does layout. Who patches the drywall the plumber opened. Who supplies temporary power and lighting. Who cleans the unit at the end. Who hoists material to the third floor. None of that is glamorous, all of it costs money, and it is generally not written down.

Write an exclusions list into the scope section, the same way you would on an estimate to an owner. It takes five minutes and it removes the most common source of friction on the job.

Insurance: verify, do not collect

Requiring certificates is not the same as being covered.

A certificate of insurance is a snapshot on the day it was issued. Policies get cancelled for non-payment, coverage lapses mid-job, and a sub who was insured in March may not be in July. Check the expiry dates against your schedule, and request additional-insured endorsements — the actual endorsement, not the certificate's checkbox, because the certificate is informational and confers nothing.

Workers' compensation is the one that hurts. If an uninsured sub's employee is hurt on your site, in most states the general contractor becomes the statutory employer and it lands on your policy, your experience modifier and your renewal. Do not let anyone start without it, including the one-man operation who says they do not need it because they are the owner — check whether your state actually allows that exemption and get the exemption certificate if it does.

Pay-when-paid, and being honest about it

Pay-when-paid clauses are common because the money genuinely does flow that way. But they shift the owner's credit risk onto the sub who has the least ability to absorb it, and courts know that.

Most states read an ambiguous clause as a timing provision — the sub is paid within a reasonable time whether or not the owner pays. A pay-if-paid clause, which makes owner payment a true condition precedent, needs explicit language and is unenforceable outright in a number of states. If you intend one, say which, and have it reviewed.

Then note that prompt payment statutes may override whatever you wrote. Many states set outside deadlines for paying subs on both private and public work, with interest for late payment, and those are not waivable by contract.

The lien waiver clause protects the general contractor most

An owner who pays the general contractor in full can still face a lien from a sub who was not paid. That makes lien waivers from lower-tier subs and suppliers the general contractor's problem, not a formality.

Collect them with every payment, in the statutory form where your state prescribes one — California, Texas, Florida, Georgia, Arizona, Massachusetts, Michigan, Missouri, Mississippi, Nevada, Utah and Wyoming all have specified forms, and a homemade waiver in those states may be worth nothing. Requiring waivers from the sub's own suppliers is what keeps a materials house from liening a job you have already paid for twice.

Termination clauses nobody reads until they need them

Two things matter here. Cure period: give a written notice period with a chance to fix the problem, because terminating without it turns your termination into the breach. And termination for convenience: it is reasonable to have, but a sub is entitled to be paid for work actually done plus demobilisation, and a clause that pays nothing on convenience termination will not survive scrutiny and will not attract good subs.

Frequently asked questions

Do I need a written subcontractor agreement for a small job?: Yes. The dollar value does not change the exposure — an uninsured injury or an unpaid supplier lien on a $6,000 job produces the same claim as on a $600,000 one.
Can I use this template as-is?: No. Use it to understand the structure and to prepare for a review. Indemnification, payment timing, lien and termination clauses are state-specific and need a local construction lawyer's eyes before you sign anything.
What insurance should I require from a subcontractor?: General liability, auto liability and workers' compensation at minimum, with the general contractor and owner as additional insureds, primary and non-contributory. Verify the actual endorsements and the expiry dates, not just the certificate.
What is the difference between pay-when-paid and pay-if-paid?: Pay-when-paid delays payment until the owner pays, but the sub is eventually paid regardless. Pay-if-paid makes owner payment a genuine condition of any payment at all, and it is unenforceable in several states.
Does a subcontractor need to be licensed?: In most states, for most trades, yes — and using an unlicensed sub can expose the general contractor to penalties and can affect the enforceability of the contract. Record and verify the licence number.
Who is responsible if a subcontractor's work is defective?: To the owner, the general contractor is responsible under the prime contract. The sub's warranty and indemnity clauses are what allow the general contractor to pass that cost back, which is why they need to be written properly.

What does a general contractor do?A GC schedules the trades, pulls the permits, carries the insurance and owns the mistakes.…