Conditions Of Sub-Contract Agreement In Construction



Occasionally Main Contractor of the construction work depends sub-contractor for accomplishing some smaller or part of the project that may require specialized technical know-how and installation methods. In those cases Main contractor selects some sub-contractors who has capacity to achieve the task within the given time frame. Hence both of the parties, ie., Main contractor and Sub-contractor to be signed an agreement which protects both the parties' interest. Here is a sample for Conditions of Sub-contract Agreement in Construction Works.



1. Specification And Scope Of Work Of The Sub-Contract Work

1.1 The specification and works to be performed by the Sub-Contractor under this agreement are described and set forth in the First schedule and Second Schedule hereto.

2. Commencement / Programme Of The Sub-Contract Work

2.1 Within 7 days of receipt of the Contractor’s written instructions so to do, the Sub-Contractor shall commence and execute the Sub-Contract works in accordance with the agreed programme as detailed in the Third Schedule hereto.

3. Terms Of Payment To The Sub-Contractor

3.1 Reimbursement to Sub-Contractor will be based on the rates and prices given in the sixth Schedule attached hereto.

3.2 The method and terms of payment are given in the Third Schedule attached hereto.

4. Variations Sub-Contract Work

4.1 The value of sub-contract variations shall be ascertained by reference to the rates and prices specified in this Sub-Contract for the like or analogous work. Where such rates are not applicable then such value shall be such as is fair and reasonable.

5. Sub-Contractor's Personnel Involved In The Sub-Contract Work

5.1 The Sub-contractor shall provide adequate supervision to carry out the works.

5.2 The Sub-Contractor's employment of workforce shall comply with the regulations of the State's Labor Law and the Sub-Contractor indemnify the Contractor against any fines or penalties imposed by Government for use of illegal workers on the Project by the Sub-Contractor.

6. Termination Of The Sub-Contract Work

6.1 The Contractor may at any time during the performance of the sub- contract works determine his sub-contract if the termination was result of the sub-contractors default.

7. Insurances To Be Provided By The Sub-Contractor

7.1 The Sub-Contractor is to maintain insurances as listed in the Fifth Schedule attached hereto.

8. Quality Assurance And Quality Plan

8.1 By signature of this Agreement the Sub-Contractor agrees to comply with the Site Quality Plan and requirements implemented by the Main Contractor.

9. Safety

9.1 By signature of this Agreement the Sub-Contractor agrees to comply with the requirements of the Contractor's safety policy. Hard hats, safety gloves and work-boots are minimum requirements to be provided by the Sub-Contractor. Coveralls will be supplied by the Sub-Contractor where it is deemed necessary by the Main Contractor.

10. Transportation

10.1 The sub-contractor shall be responsible for transportation of staff to and from the site unless otherwise agreed.

11. Accommodation and Food

11.1 The Sub-Contractor shall be responsible for accommodation and food for his staff unless otherwise agreed in writing by the Main Contractor.

Attachment Schedules



Employer: Name of the employer (client of main contractor)

Contractor: Contractor name

Date of Main Contract:

Brief Description of Main Works

Main Contract Documents: Specification Section ----------


A.  The Sub-Contract Works: Description of sub-contract work

B.  Other Documentation Forming Part of the Sub-Contract Agreement

  • Quotation from ----------------------------.
  • Specification
  • Method statement

C.  Contractor's Representative

  Name of the authorized signatory




A.  The Sub-Contract Agreement Price: (See Sixth Schedule)

  In the event of additional work, operations being required they will be paid in accordance with the Schedule of rates attached hereto (Sixth Schedule).

B.  Method and Terms of Payment for the Sub-Contract Works and Variations:

 Payments within 15 days of monthly invoice supported by the Contractor’s work sheets which have been approved by the contractor’s representative.

C.  Period of Sub-Contract Works (The Programme):

All works to be in accordance with (Designation of the concerned person) Instructions and Main Contract Program in Conditions of Contract

D.  Retention as a Percentage of the Price:

Retention of 10% will be withheld from Sub-Contractor..

E.  Release of Retention:

Full retention amount to be released on Contractors receipt of retention monies following the Taking over Certificate issued on substantial Completion. Balance to be released following final release of retention monies by the Client.

F. Bonus for Early Completion: 

Not applicable

G.  Penalty for Late Completion:

Not applicable



The Contractor shall supply the following attendances to the Sub-Contractor at the Rates indicated:

1.  Reasonable use of drinking water - Free of cost

2. First Aid facilities.     - Free of cost

3.  Health and Welfare facilities.       -  Not applicable




  A.  The Contractor or Employer has arranged and shall maintain All Risk Insurance cover in respect of Works. The Sub-Contractor may have sight of such policies as exist to provide the foregoing cover at the Contractor's Site offices and shall acquaint him and allow for the level of excesses stated therein.

  B.  The Sub-Contractor shall provide and maintain insurance cover in respect of Workmen's Compensation/Employer's Liability in a form and to a level required by local law.

  C.  The Sub-Contractor shall provide and maintain insurance cover in respect of all his plant, equipment and vehicles in a form and to a level required by local law.

  D.  The Sub-Contractor shall provide and maintain insurance cover in respect of Third Party Claims.




  1. Rates

  • ALL AS PER QUOTATION SUBMITTED UNDER COVER OF (Company name and reference).

  2. Terms

  • Payment for work executed will be monthly intervals. The sub-Contractor shall submit his monthly valuation on a date mutually agreed with the contractor. Payment of interim valuation will be made within fifteen days of Contractor’s receipt of the relevant monies from the client.

--------------------------------------- ----------------------------------------

Authorized Signatory on    Authorized Signatory on

Behalf of the Sub-Contractor  behalf of the Contractor

Download Attachment here.



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