Subcontractor Agreements
Keeping things clean when you bring in trades or freelancers.
Notes from Randall Harper. Thirty years working alongside owner-operators, executives and boards — companies of all types and sizes — across entertainment & media, hospitality, service based business, lifestyle businesses, financial services, retail and not-for-profit, in Australia, Asia, the United Kingdom and the United States. What follows is the thinking I keep returning to.
Subcontractors are extensions of your business, in the customer's eyes
When a subcontractor turns up to a customer site, the customer sees them as your business, regardless of any legal niceties. Their quality, their conduct, and their reliability reflect on you. The agreement you have with them needs to reflect this — both in what it requires of them, and in what it protects you against if things go wrong.
What the agreement must cover
- Scope — exactly what work, what standard, what timeline.
- Price — flat fee, hourly, or per-task; payment terms.
- Insurance — minimum public liability they must hold, with certificate provided.
- Workmanship — warranty period, what happens if work is defective.
- Confidentiality — customer information they may encounter must stay confidential.
- Non-solicitation — they don't approach your customers directly.
- Independent contractor status — clearly documented to avoid sham contracting risks.
Insurance evidence, every time
Always sight a current certificate of currency for the subcontractor's public liability insurance before they start work, and keep it on file. If they cause damage and they're uninsured, the customer will look to you. A two-minute check at the start of the relationship — and an annual refresh — protects you from a potentially significant exposure.
Pay them properly, and on time
The fastest way to lose your best subcontractors to a competitor is to pay them late. The fastest way to keep them is to be the customer they get paid by first, every time. Reliable, predictable payment costs nothing and buys priority, flexibility, and goodwill that pays back many times the modest discipline required.
Quality control them gently
Subcontractors will, occasionally, deliver work that falls short of your standard. Address it directly and early, in a conversation rather than an email. Most subcontractors will adjust quickly when given clear, calm feedback. The ones who don't are signalling that the relationship is not a long-term fit, and it is better to know that sooner than later.
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The contents of this paper are the opinion of Clear Point Advisory only. Readers should rely on their own judgement and obtain professional advice appropriate to their circumstances.