Construction subcontract agreement template
A construction subcontract is the agreement between a main contractor and a subcontractor who carries out part of the work on a project, covering the scope, the price, the programme, payment, retention and how disputes are settled. It is signed before the subcontractor starts. The project, the package of work, the sum and the payment terms change with every subcontractor.
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What changes each time
35 values. Everything else is your wording, kept exactly.
The parties and the project
- Date of the subcontract
- Main contractor's name, number and registered office
- Subcontractor's name or company and address
- Project name and site address
- Main contract form, date and employer
- Main contract extracts attached
The works and price
- Subcontract sum
- Lump sum or remeasured
- VAT treatment: reverse charge, added, or not registered
- Items supplied by the contractor
- Subcontract works: item, description, quantity, rate, amount
- Drawings, specification and programme with revisions
- Exclusions
Time
- Start on site
- Completion
- Damages for delay per day or week and maximum
- Days to price a variation
Tax and registration
- Subcontractor's UTR
- Company registration number
Payment
- Application date each month
- Due date each month
- Days after application for due date
- Final date for payment
- Pay less notice period
- Retention percentage and cap
- Retention release: end of defects period or fixed months
Defects, safety and insurance
- Defects period
- Days to remedy before the contractor ends the subcontract
- Waste removal: contractor's skips or off site
- Public liability cover
- Employer's liability cover
- Professional indemnity cover and years after completion
- Contractor's all risks on plant
Ending and disputes
- Days to remedy before termination for non-payment
- Adjudicator: agreed or nominated, and the nominating body
The rules it usually needs
Written in plain English when the template is set up.
- One of several wordings
“State the price as a fixed lump sum or subject to remeasurement at the schedule rates.”
Only the chosen basis appears.
- One of several wordings
“State the VAT as the domestic reverse charge, VAT added, or subcontractor not VAT registered.”
Only the chosen VAT sentence appears. The reverse charge sentence says who accounts to HMRC.
- One of several wordings
“Release the balance of retention at the end of the defects period, or a stated number of months after practical completion.”
Only the chosen release date appears.
- One of several wordings
“Say that waste goes to the contractor's skips, or is removed off site at the subcontractor's cost.”
Only the chosen arrangement appears.
- One of several wordings
“Name the adjudicator as agreed by the parties, or nominated by a body such as RICS or CIArb.”
The nominating body is written in only on the second form.
- Only when…
“Include damages for delay only when agreed.”
The amount per day or week and the maximum are written in.
- Only when…
“Include retention only when it is more than 0%.”
The percentage, the cap and the release dates appear.
- Only when…
“Include professional indemnity and contractor's all risks cover only when the subcontractor does design or brings its own plant.”
Each row of the insurance table appears only when it applies.
- Once for each item
“One row in the subcontract works table for each item of work.”
Three packages of work give three rows with quantity, rate and amount, adding up to the subcontract sum.
Questions people ask
What is a construction subcontract?
A contract between a main contractor and a subcontractor for part of a project, setting out the work, the price, the time allowed and the payment terms.
What is the Construction Industry Scheme?
A scheme under which contractors deduct tax from payments to subcontractors for labour and pay it to HMRC. The rate depends on how the subcontractor is registered.
What is retention?
A percentage of each payment held back by the contractor until the work is complete or the defects period has ended, as security for putting defects right.
Can a subcontractor refer a dispute to adjudication?
Yes. Construction contracts give a right to refer a dispute to adjudication at any time, and the subcontract says how the adjudicator is chosen.
What is the VAT domestic reverse charge?
For many construction services between VAT-registered businesses reported under the Construction Industry Scheme, the customer accounts for the VAT instead of the supplier, unless the customer is the end user.
Use this template
It opens in DocuWeave as a template you can check, change and publish. Nothing is used until you do.