Subcontractor Agreement
The contract that defines what a sub builds, for how much, and on what terms.
Quick Answer
A subcontractor agreement is the contract between a general contractor and a subcontractor that defines the scope of work, price, schedule, payment terms, and risk allocation for a portion of the project. It usually flows down obligations from the prime contract and attaches a scope exhibit. Standard forms include AIA A401 and ConsensusDocs 750.
The Full Picture
A GC signs a prime contract with the owner but performs much of the work through subcontractors. The subcontractor agreement passes the relevant obligations down to each trade and defines exactly what that trade is responsible for. Without it, the GC carries promises to the owner that no one below it has agreed to keep.
Mechanically, the agreement has a general terms section and exhibits. General terms cover payment and retainage, schedule obligations, changes, insurance and indemnification, bonds, dispute resolution, termination, and flow-down of prime contract requirements. The exhibits typically include the scope of work, a list of contract documents including addenda, the schedule, insurance requirements, and any accepted alternates or unit prices. Many GCs use their own forms; industry standard forms include AIA A401 and ConsensusDocs 750.
In practice, the scope exhibit does the heavy lifting. It should reflect the bid, the clarifications agreed during leveling, the accepted alternates, and specific inclusions and exclusions at trade seams. A vague exhibit such as 'per plans and specs' invites disputes over who owns items that fall between trades.
For preconstruction, the subcontract is where bid leveling results become enforceable. The buyout process turns the leveled scope and negotiated terms into signed agreements. Missed clarifications or undefined exclusions at this step often reappear later as change orders or back-charge disputes.
Real Examples
Common Misconceptions
People assume: Listing 'per plans and specs' is a sufficient scope.
Actually: Plans and specs are organized by discipline, not by subcontract. A scope exhibit that names inclusions, exclusions, and trade seams prevents disputes that a generic reference leaves open.
People assume: The subcontract only matters after construction starts.
Actually: It is the final step of preconstruction procurement. Bid clarifications, alternates, and leveling decisions only protect the GC if they are written into the subcontract at buyout.
Does MeltPlan Solve This?
Partially — adjacentPartially — MeltPlan handles trade scope creation, which becomes the foundation of a subcontract's scope exhibit. Its AI reads your construction documents and identifies the scope of work for each trade package, so the scope you bid is the scope you can carry into the agreement. MeltPlan does not draft contract terms, insurance, or legal clauses; those stay with your contracts team.
Build trade scope from your documents →Frequently Asked Questions
What should a subcontractor agreement include?
Scope of work, contract price and payment terms, retainage, schedule, change procedures, insurance and indemnification, bonds if required, flow-down of prime contract terms, dispute resolution, and termination provisions, plus exhibits for scope, documents, and schedule.
What is a flow-down clause?
A provision that binds the subcontractor to the GC's obligations under the prime contract to the extent they apply to the sub's work, so the GC is not left holding obligations its subs have not accepted.
What are common standard subcontract forms?
AIA A401 (Standard Form of Agreement Between Contractor and Subcontractor) and ConsensusDocs 750 are widely used. Many large GCs use their own customized forms.
How does bid leveling connect to the subcontract?
Leveling establishes what each sub included, excluded, and clarified. Those results should be written into the scope exhibit at buyout so the agreed scope is enforceable.