A custom construction contract is the key to streamlining any construction company owner’s business and building a preventive defense for your hard work. In this blog, we will dive into an underutilized contract that GCs on both residential and commercial can use to make their lives much easier and their work more streamlined: The Master Subcontract Agreement.
Who Needs a Master Subcontract Agreement?
A Master Subcontract Agreement is for GCs who consistently use the same subcontractors on the projects they take on. This agreement is signed with your true subcontractors, meaning those who have their own businesses and are not employees. This document streamlines all future projects with that subcontractor. This means that the subcontractor must only sign this document one time. Then, on all future projects, they only need to be issued a work order with each project’s details, payment information, and the timeframe of the project instead of getting together to sign a whole new subcontract. This kind of contract can be a huge time and effort saver for GCs who have a consistent relationship with solid subcontractors in their area and is an underutilized advantage by many construction contractors!
Details of a Master Subcontract Agreement
A Master Subcontract Agreement encompasses everything your subcontractor might need to know when working for you. This includes insurance requirements, confirmation that they are independent contractors and not employees, and all the other legal technicalities needed to protect you and your business. It also includes the pay-when-paid clause, which establishes expectations for their payment and has its terms in writing. Establishing these expectations with your subs on the front end is essential—a master subcontract agreement allows you to do just that.
Negotiate Better Construction Contracts
At The Cromeens Law Firm, we have extensive knowledge and understanding of construction contract laws and are licensed in Texas, Georgia, and California. We are often able to solve contract disputes for our clients through informal negotiations, mediation, or arbitration. Work with us to equip yourself with the ability to properly evaluate your risks before you sign and negotiate your next subcontract with greater confidence and ease.
Additionally, from a protective standpoint, this contract works to protect the GC from two especially prominent legal issues. The first is the question of liability; having a master subcontract agreement in writing can prevent the predicament of a workplace injury, making you fully liable for the incident. Without a master subcontract agreement, the injured subcontractor can claim that they are an employee and cause many issues for you in the courtroom. The other issue this can protect you against is the subcontractor’s claim that they were hired for a different dollar amount than they actually were. Having this agreement in writing can be a massive aid in defending you in those instances. A master subcontract agreement is a great way to build a better business!
Why Do You Need a Construction Contract?
In such a challenging industry that can come with so many legal landmines, it is a great advantage for construction professionals—especially GCs—to know how to enforce their legal rights and protect the work they and their subcontractors do. While this contract may not be considered necessary, the benefit of having a master subcontract agreement is huge. If you are a GC who wants to set your business up for success and take the next step in streamlining your workflow, consider getting a master subcontract agreement created for your company! Our skilled team of construction attorneys can help you get started.
Knowing how to protect yourself best is essential, especially when growing your business, and having a team to support you when you’re facing the potential of getting sued is a huge advantage. The Cromeens Law Firm team is here to help keep you out of the courtroom on the front end or help you win the fight inside of it. Contact us today and set yourself up for success with the support of a legal team.
This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, consult an attorney.