Sub Contractor Agreement Template - South Africa

A sub contractor agreement template South Africa main contractors can use when bringing trades and specialists onto a job.

SUB CONTRACTOR AGREEMENT TEMPLATE

For the appointment of individuals or businesses

Summary

This Sub Contractor Agreement can be used to appoint a sub-contractor to deliver services to a customer on the main supplier’s or Prime Contractor’s behalf. The sub contractor agreement contract sets out the rights and obligations, and establishes the terms and conditions of the sub-contractor’s delivery of services.

Who should use a Sub Contractor Agreement?

You should use a written Sub-Contractor's Agreement if you appoint sub-contractors to deliver services to your customers on your behalf. The contract gives effect to the contractor appointment, and sets out the terms of relationship with a Sub-Contractor, including the terms of payment and the services required.

What does the agreement include?

The sub contractor agreement includes clauses relating to: interpretation; appointment; sub-contractor duties and acknowledgements; prime contractor’s responsibilities; fees; indemnities; restraints; confidentiality; termination; force majeure; arbitration; breach; general clauses.

What does this contract look like?

These terms and conditions can be printed onto fifteen pages.

How do you use this sub contractor agreement?

• Read the sample sub-contractor agreement to ensure that it meets your needs. The template agreement is editable, allowing you to make changes to it.
• Complete the relevant details of the sub-contractor appointment, add any services and fees annexures, get your sub contractor to sign, and you sign in acknowledgement.

What is the difference between the various Contractor Agreement templates?

You may have noticed that we have a few different versions of Contractor Agreements. What are the differences between them? Here is a brief description of the agreement templates we have available:

• Basic Contractor Agreement: this contract addresses basic, general terms & conditions for appointing a contractor. Use this contract template for smaller projects, or with smaller companies, or where the parties don’t want or need a long and more comprehensive contract. This agreement makes provision for sub-contracted work as well.
• Comprehensive Contractor Agreement: this contract template addresses terms & conditions for appointing a contractor, but is more detailed and comprehensive than the Basic Contractor Agreement. It provides wider coverage, making it longer and more involved. Recommended for use in larger projects, larger companies, or where the parties need or want a more comprehensive document.
• Sub Contractor Agreement (this agreement): this contract is used where a company has received an order, but needs help to deliver the products and services to its customer. The company can appoint a sub-contractor to help it meet the obligations in the client’s order. This is a detailed sub contractor document. For a simple sub-contractor agreement the Basic Contractor Agreement can be used.

The Use and Terms of a Subcontractor agreement template:

A subcontractor agreement template is a legally binding contract(written agreement) between a contractor or contracting company being one party to the agreement and a subcontractor being the other party hereto (often a general contractor), outlining the terms of their working relationship.

It specifies the work to be done and the work for which the subcontractor is solely responsible, services hereunder, payment terms, deadlines, intellectual property rights of the subcontractor (general contractor) and hiring contractor or company, effective date of the independent contractors agreement, any direct costs to the company and the general contractor, employment benefits for the general contractor, fixed price for services as agreed to within the subcontractor contract, legal fees, and other remaining provisions and important details to which the hiring contractor and sub contractor agrees. (both parties agree hreto)

Our subcontractor agreement template comes in a Microsoft word format and is completely editable to the needs of the parties hereto.

Some important elements of subcontractor agreements include:

• The definition of subcontractor's work and scope of work to which both parties agree and is always included within subcontractor agreements.
• Use of a subcontractor agreement template.
• The subcontractor agreement form is to be read together with the prime contract to which both the subcontractor and the other party hereto is bound.
• Independent contractor status and undertaking such as that the subcontractor will perform the Services hereunder in a professional and workmanlike manner.
• Entire agreement clause, bringing together each provision of this agreement as set out throughout the entire agreement read together with the prime contract. This is a very common clause within subcontractor agreements.
• The independent contractor agreement shall set out all Subcontractor warrants to which both parties agree. The Subcontractor agrees to defend and indemnify the Contractor, as well as any of the Contractor's affiliated entities and/or individuals, from all third party claims that arise out of, or relate to, the Subcontractor's work
• Legal fees and dispute resolution afforded in accordance with the local laws and any other applicable law. As well as any such notice to be given to the other party during dispute resolution.
• Payment terms and final payment to the subcontractor by the other party hereto.
• An important provision of this agreement is the Scope of work and intellectual property.
• Insurance policies and necessary permits required under this subcontractor agreement.
• Governing law and competent jurisdiction having bearing on the subcontractor agreement.
• The subcontractor agreement sent out the Hiring contractor and subcontractor relationship.
• The use of a simple subcontractor agreement form.
• Prior written consent for any changes or modifications to any provision of this subcontractor agreement.
• The responsibility of the subcontractor for their work as well as actions that constitute willful misconduct for which the subcontractor will be held responsible under this subcontractor agreement.
• The requirement for the subcontractor to obtain any necessary permits and licenses under this subcontractor agreement.
• The subcontractor agreement also addresses the exclusivity of the arrangement with other subcontractors and whether this is an exclusive arrangement or not.
• The considerations of the prime contract and its bearing on the subcontractor agreement.
• The subcontractor agreement sets out the requirement for the subcontractor to maintain insurance policies, including commercial general liability and automobile liability under the subcontractor agreement and similar agreements concluded with a general contractor.
• Workers compensation to the general contractor under the subcontractor agreement.
• The provision for legal protection for both parties in case of any disputes as well as any written notice to be given in accordance with the subcontractor Agreement.
• The force majeure clause within the subcontractor agreement, which excuses performance in case of unforeseeable events. In the case of such failure the subcontractor agreement shall not be seen as breached.
• The requirement for a return receipt requested for any written notice is set out within the subcontractor agreement.
• The Subcontractor agreement shall have the inclusion of specific details about the project to be completed by the general contractor, such as the required services and intellectual property rights to which the subcontractor agrees as well as other parties relevant to the subcontractor Agreement.
• The provision for attorneys' fees and costs to the prevailing party in any legal action.
• Once signed by the subcontractor (general contractor) and the other party hereto, the agreement shall be in full force and effect as both the prime contractor and subcontractor agrees to its terms in full.

A subcontractor agreement template should be carefully drafted to ensure that all parties involved are protected and that the project is completed successfully. It is essential to seek the assistance of legal experts and to use a reputable subcontractor agreement template.

The subcontractor agreement template is a critical document that should be carefully crafted by legal experts to ensure that both parties are protected in case of any misunderstandings or disputes.

When to use a sub contractor agreement

A sub contractor agreement is what a main contractor signs with the specialists who do part of the job. It sits underneath the head contract and needs to line up with it.

Most disputes on site come from a gap between the two documents: the main contract promises something the sub contract never passed down, and the main contractor is left carrying it.

Who this template is for

Main contractors bringing in trades and specialists, and sub contractors who want the scope and payment terms agreed before they start on site.

What you get

• An editable document in Microsoft Word, plus a PDF copy
• Wording drafted and reviewed by a lawyer
• Clauses covering scope, payment, duration, insurance and termination
• Instant download after purchase

The parts worth getting right

• Make sure the scope matches what the head contract requires, with nothing falling between the two
• Tie payment to the main contract terms, so you are not paying out before you are paid
• Agree who carries insurance and to what level
• Set out how variations get approved, and by whom, in writing
• Deal with health and safety responsibilities explicitly

Good to know

A sub contractor agreement is a template for you to adapt, not legal advice on your project. Construction work in South Africa also carries health and safety duties under the Occupational Health and Safety Act, and long-running engagements can raise employment questions, so it is worth having an attorney review your final wording.

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