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Subcontractor Agreement Template — Construction & Trades
Hire framers, electricians, plumbers, HVAC, roofers, and other trades with a contract that covers scope, insurance, indemnification, and lien waivers. $9.99 PDF.
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No signup required$9.99 PDFInstant downloadA Subcontractor Agreement is the contract a general contractor (GC) signs with a specialty trade — framer, electrician, plumber, HVAC installer, roofer, drywaller, painter, concrete crew, or landscaper — to perform a defined portion of a larger construction project. Unlike a prime contract between the owner and the GC, a subcontract sits one tier down the contracting chain and must be tightly drafted to protect the GC from the things that go wrong on jobsites: defective work, uninsured injuries, mechanic's liens filed by the sub or the sub's suppliers, and payment disputes when the owner withholds funds. A well-written subcontract spells out the scope of work, materials and labor responsibility, the payment schedule (including retainage typically held until substantial completion), insurance and bonding requirements, indemnification running upstream to the GC and owner, conditional and unconditional lien waivers tied to each progress payment, change-order procedures, schedule and milestones, safety and OSHA compliance, and termination for convenience or cause. It also incorporates the prime contract by reference so the subcontractor is bound to the same standards the GC owes the owner.
Why use this template
- Clear scope of work and trade-specific deliverables so the GC and sub agree on exactly what is included — and what is extra work
- Built-in lien waiver language (conditional and unconditional, progress and final) to protect against mechanic's liens from the sub or its suppliers
- Insurance and indemnification provisions naming the GC and owner as additional insureds and shifting jobsite risk to the trade performing the work
- Retainage and progress-payment schedule that ties the sub's cash flow to the GC's draw schedule with the owner — pay-when-paid / pay-if-paid options
- Instant PDF download — no subscription, no account required, ready to sign before the sub mobilizes on the jobsite
Common use cases
- →A general contractor hiring a framing crew for a custom-home build
- →A residential remodeler bringing on a licensed electrician for a kitchen rewire
- →A commercial GC subcontracting HVAC installation for a tenant fit-out
- →A roofing company hiring a labor-only crew for a multifamily re-roof
- →A home builder engaging a concrete sub for foundations and flatwork
- →A landscape contractor subcontracting irrigation or hardscape installation
Frequently Asked Questions
What is the difference between a subcontractor and an independent contractor?▼
All subcontractors are independent contractors, but not every independent contractor is a subcontractor. A subcontractor specifically works under a higher-tier contractor (the GC or prime), performing a portion of a larger project the GC has contracted to deliver to the owner. The legal relationship is one tier down: the owner pays the GC, the GC pays the sub, and the sub typically has no contractual privity with the owner. That structure matters for payment (pay-when-paid clauses), for mechanic's lien rights, for indemnification flowing upstream, and for whose insurance covers an accident on the jobsite.
What is retainage, and how much is normal?▼
Retainage is a percentage of each progress payment that the GC withholds from the subcontractor — usually 5% or 10% — and releases at substantial completion or after the statutory lien period expires. It exists to ensure the sub finishes the work, returns to fix punch-list items, and that no liens are filed by the sub's suppliers. Many states cap retainage by statute (often at 10% early in the project and 5% after 50% completion) and require it to be released within a defined number of days after substantial completion. Always check the project state's prompt-payment and retainage statutes — they often trump contract terms.
Are "pay-if-paid" clauses enforceable?▼
It depends on the state. A pay-if-paid clause makes the GC's receipt of payment from the owner a condition precedent to the GC's obligation to pay the sub — shifting the risk of owner insolvency entirely to the sub. California, New York, North Carolina, Wisconsin, Illinois, and several other states have ruled these clauses void as against public policy or limited them severely. "Pay-when-paid" (a timing provision saying the GC will pay within a reasonable time after the GC is paid) is far more widely enforceable. This template lets you choose; pick pay-when-paid for safety unless you've checked the state's case law.
What insurance should I require from a subcontractor?▼
At minimum: (1) Commercial General Liability with $1M per occurrence / $2M aggregate, naming the GC and owner as additional insureds on a primary and non-contributory basis with waiver of subrogation; (2) Workers' Compensation at statutory limits — this is mandatory for any sub with employees in nearly every state and protects the GC from being pulled into employee injury claims; (3) Commercial Auto Liability with $1M combined single limit; (4) for larger or higher-risk work, an Excess/Umbrella policy of $1M–$5M. Demand a Certificate of Insurance before the sub mobilizes — no COI, no work on site. For specialty trades like roofers or excavators, consider higher limits and pollution coverage.
How do lien waivers protect the general contractor?▼
When a subcontractor or supplier isn't paid, they can file a mechanic's lien against the owner's property. The owner then comes after the GC, who is contractually obligated to deliver a lien-free project. Lien waivers are the GC's primary defense. The cleanest practice: collect a conditional waiver-and-release on progress payment with each invoice (effective only when the check clears), then an unconditional waiver-and-release after each payment is honored. At project closeout, collect final unconditional waivers from the sub and from every supplier or lower-tier sub that worked under them. Many states have statutory waiver forms (CA has four mandatory forms) — use them. This template includes the lien-waiver requirement; the actual waiver forms are exchanged with each payment.
Does this agreement work in all 50 states?▼
Yes — the core subcontract is enforceable everywhere, and you select the governing state. That said, construction law is highly state-specific. The retainage cap, lien filing deadlines, pay-if-paid enforceability, anti-indemnity statute, license-disclosure requirements, and prompt-payment statutes vary by state and will override conflicting contract terms. The template includes flexible options for the most state-sensitive provisions (pay-when-paid vs. pay-if-paid, indemnification scope, retainage percentage). For larger projects (over $100K, or any commercial work), have a construction attorney review the prime contract and the subcontract together before signing — the cost is small compared to one disputed change order.
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