Imagine you’ve landed a big project, but there are some specialised tasks outside your expertise. Rather than turning down the job, you bring in someone else to handle those parts. That’s where a subcontractor agreement comes into play. So, what is a subcontractor agreement exactly, and why is it important?
Subcontractor Agreement Explained
A subcontractor agreement is an agreement in writing between a contractor and subcontractor setting out the expectations for their engagement. If you use subcontractors in any capacity, it is always advisable that you have one of these in place. Yes, it’s true that it may not be a legal requirement. But by doing so, you grant yourself peace of mind – and who doesn’t want that?
For starters, you can outline the terms of the subcontractor’s engagement. It may be that these are fairly specific, and, as such, it is much more useful to draft a bespoke contract rather than to use a generic template that doesn’t protect you in the slightest.
This enables you to list all applicable requirements and avoid confusion later down the line–after all, everything will be set out in writing. Furthermore, this will help you stay on the right side of IR35 as, where the subcontractor has signed an agreement, they can no longer feign ignorance and state that they believed they were an employee: the proof is right there!
Avoid Costly Disputes
Now that you know what a subcontractor agreement is and its importance, let’s discuss one of its biggest benefits. Subcontractor agreements are also always a great help in resolving disputes quickly and efficiently. Think of this: the last thing you would ever want is a nightmare scenario where the subcontractor refuses to rectify unsatisfactory work and, as a result – as well as at the risk of your reputation and, potentially, the relationship with the client – it has now become your job to do so, expenses and all.
After all, you will always be responsible for meeting client expectations, as well as for the acts and omissions of the subcontractors you use. Therefore, it is essential that such subcontractors conduct themselves in an appropriate way and in accordance with the subcontractor agreement. If they do not, taking legal action and/or recovering losses is made so much easier.
If you feel an updated or entirely new subcontractor agreement could benefit you, then speak to us at BEB. Get in touch with us today on 01604 217365 or info@bebconsultancy.co.uk.