Free Sample Outsourcing Agreement Templates

To help you grow your business, we have created a fairly simple yet reliable subcontract template in Word and PDF versions so you can use it over and over.

What's in this model?

• Work's extent

• Indemnity

• Payment terms

What is a subcontract?

A subcontracting agreement is a legal contract between two parties, contractors or project managers and subcontractors. The agreement specifies the responsibilities of both parties. It offers protection to the company that hires a subcontractor by highlighting labor tax deductions and payment terms, etc.

When you use a subcontractor, you have the right to require them to comply with certain conditions. A legal subcontract is one of the most effective ways to do this. A subcontract can also help you avoid unnecessary expenses. Indeed, it clearly establishes the rules and limits of the task to be performed. This contract can also allow you to deal with problems such as delays or non-compliance of the work.

What is outsourcing?

Subcontracting concerns companies that call on a third party, not to supply materials or products, but to carry out part of the work. In other words, it means that a contractor can hire a subcontractor to carry out part of his project and assign him tasks or activities.

Once the project is completed, the subcontractor must report to the principal. Most of the time, it is the entrepreneur who manages the whole project, although this is not always the case, because he can subcontract part of his activity.

What differentiates subcontracting from sales is that the principal retains authority and responsibility over the work of the subcontractor.

What are the types of subcontracts?

Subcontracts can be classified into three main categories:

– The free contract:

It is when the client entrusts the work to the subcontractor without compensation. This is a contract of pure friendship.

– The contract for valuable consideration:

This type of contract is the most common. It is characterized by a payment, direct or indirect, in return for the client.

– The contract for consideration and free of charge:

In addition to payment, the principal may have another obligation, such as supplying raw materials, supplies, etc.

Why do I need a subcontract?

A processor agreement is important because it outlines each party's responsibilities and expectations to avoid any misunderstandings or disputes in the future. It also ensures that if a claim should arise, the liable party is liable. In addition, a subcontracting agreement details all the working and payment conditions as well as the termination clause so that both parties can easily understand what to expect from each other and are aware of the things to do's and don'ts of the contract.

Important Terms

What should a subcontract contain?

A subcontracting agreement must include the following elements:

Work's extent

This part of the contract includes the details of the project and the responsibilities expected of the subcontractor. It highlights things like the name of the project, the name of the project owner, and the tasks that the contractor is responsible for.

Works duration

This section includes project due dates and duration of services. The project structure can also be listed here in this section.

Payment and invoicing

It includes payment and billing details, including payment amount, method of payment, and any fees or additional charges to be paid. You should also include the payment schedule highlighting an appropriate day, date and time.

Clarify status

The status of contractors needs to be clarified, indicating that they are not full-time employees, so they must pay their taxes and are responsible for reporting.

Non-disclosure

If you are working on a sensitive project with confidential information that cannot be revealed and shared with others, you must have a non-disclosure agreement (NDA).

This section of the contract emphasizes that project information must be kept confidential.

Non-competition

This clause indicates that the subcontractor cannot work directly with your client by removing you.

Work for the job

This section clarifies that when you hire a subcontractor, you have ownership of the work they produce or the service they provide.

Insurance

This clause stipulates that the subcontractor is responsible for the payment of all its insurance and other related coverage due to its independent status. It typically includes commercial liability, errors and omissions, and workers' compensation insurance.

Indemnity

The indemnification clause ensures that the subcontractor is responsible for the quality of the work they produce.

For example, if a subcontracted web designer performs work for a company and commits copyright infringement, the actually hired web designer may be responsible for the costs of defending a lawsuit.

Promises and Warranties

This section of the contract highlights the professionalism of the subcontractors. It also states that the work must be original and that if they have to make changes or corrections, they must be responsible for them.

Termination or modification

This section highlights the terms of termination and also explains the condition under which a contract can be terminated or modified.

There should be a written termination notice to officially end the contract