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Use this Sample Subcontractor Agreement Template

We started this report with our finding that more than half of small IT businesses don't have formal subcontracting agreements. That data point suggests two things:

  1. IT businesses have significant risk exposure through their subcontractors.
  2. IT business owners may not be familiar with subcontracting agreements.

To help you on both fronts, we've provided a sample subcontracting contract as a starting point for your next hire, along with an explanation of how these agreements work. It’s linked below as a Word document.

Sample Subcontractor Agreement

What’s In a Subcontracting Agreement?

The sample subcontractor contract outlines basic contract terms, including…

  • Compensation.
  • Payment schedule.
  • Rights subcontractors give you to their work.
  • Which expenses, if any, the subcontractor may be reimbursed for.
  • Scope of work.
  • Rights to terminate the contract.
  • Requirements for Technology Errors and Omissions Insurance.

Our sample template includes the basic conditions you should impart to protect your business from unnecessary liability when you hire a subcontractor.

By defining these terms, you may avoid some of the miscommunications that can lead to lawsuits. Additionally, a good contract will offer warranties and indemnification, which clarify sticking points and theoretically limit what a subcontractor could sue your business for.

How to Use this Subcontracting Agreement Template

It's important to note that this subcontracting agreement is a starting point, not a final product. Your business should always consult with a lawyer and build a custom contract when working with a new subcontractor.

Why?

Contracts should be tailored to your project and the specific area of IT you work in. For example, if you work in healthcare IT, your subcontractors will need to follow HIPAA standards, and this expectation should be outlined in your contract.

If you work in web design, you’ll want to ensure your contract gives you the rights to any creative content (e.g., logos, images, designs, etc.) a subcontractor develops for the project.

Next time you hire a subcontractor, start with this template, adapt it for your project, and ensure you’re not among the 54 percent of IT businesses that go without subcontractor agreements.

Next: Conclusion