As a business attorney who has drafted and reviewed hundreds of construction contracts across the United States over the past twelve years, I know firsthand how critical a rock-solid general contractor subcontractor agreement is to keeping projects profitable and lawsuits at bay. A well-written subcontract protects both the general contractor and the subcontractor, clearly defines scope, payment terms, insurance requirements, and dispute resolution – all while staying compliant with state and federal law.
In this article, I’m giving you my battle-tested, attorney-drafted general contractor and subcontractor agreement template – completely free to download in both PDF and editable Word format at the bottom of this page. I’ve used versions of this exact document on multi-million-dollar commercial projects and small residential remodels alike.
Verbal agreements and “handshake deals” still happen far too often in construction, and they are the number-one reason I get retained for collection and breach-of-contract lawsuits. The IRS, bonding companies, and most state licensing boards (California CSLB, Texas, Florida, etc.) all expect written contracts once payments exceed certain thresholds – often as low as $500–$2,500 depending on the state.
A proper construction subcontractor agreement eliminates 90% of the disputes I see in my practice:
Based on my experience and current IRS guidelines (see IRS Independent Contractor Rules and Form 1099-NEC requirements), here are the non-negotiable sections:
| Clause | Why It Matters |
|---|---|
| 1. Independent Contractor Status | Clearly establishes the sub is NOT an employee (critical for IRS and DOL compliance) |
| 2. Detailed Scope of Work + Plans/Specs | Prevents “that wasn’t in my bid” disputes |
| 3. Payment Schedule & Retainage | Ties progress payments to milestones and includes prompt-payment language |
| 4. Change Orders in Writing | Eliminates verbal “extras” that kill margins |
| 5. Insurance & Indemnification | Requires CGL, workersors’ comp, and often additional-insured endorsement |
| 6. Lien Waivers (Conditional & Unconditional) | Matches AIA G702/G703 or state-specific formats |
| 7. Termination for Cause & Convenience | Protects GC if sub defaults or project is cancelled |
| 8. Dispute Resolution (Notice → Mediation → Arbitration/Litigation) | Keeps you out of court when possible |
| 9. Flow-Down / Prime Contract Incorporation | Binds sub to owner-GC contract terms (crucial on public jobs) |
I’ve updated this template for 2025 to include the latest IRS 1099-NEC language, prevailing wage references (for public work), and current prompt-payment act citations that apply in most states.
Download General Contractor Subcontractor Agreement – Word (.docx)
Download Construction Subcontractor Agreement – PDF
(Links will appear after publication – instant download, no email required)
Step-by-step instructions I give every one of my GC clients:
Even experienced contractors send me agreements with these fatal flaws:
Q: Can I use this general contractor agreement with subcontractor for any trade?
A: Yes – framing, plumbing, electrical, HVAC, drywall, painting, roofing – the template works for all.
Q: Does this template satisfy Davis-Bacon prevailing wage requirements?
A: It includes flow-down language and a prevailing wage exhibit placeholder for federal and many state-funded jobs.
Q: Is this a “pay-when-paid” or “pay-if-paid” contract?
A: The default is pay-when-paid (safer and enforceable in most states). I include optional pay-if-paid language in the footnotes.
Q: Do I need to file this with anyone?
A: No, but keep it on file. You’ll need it for 1099-NEC reporting and any payment bond or lien claims.
I’ve seen million-dollar projects implode over a $3,000 change order that wasn’t documented. I’ve watched great subs go out of business because a GC used a terrible contract. A strong subcontract agreement for construction is the ounce of prevention that’s worth ten pounds of litigation cure.
Download my free template today, customize it once, and reuse it on every job. Your margins – and your sanity – will thank you.
Disclaimer: This general contractor subcontractor agreement template is provided for informational purposes only and does not constitute legal advice. Laws vary by state and project type. Always have your final contract reviewed by a licensed attorney in your jurisdiction before execution.
Ready to protect your business?
↓ Download Free General Contractor Subcontractor Agreement (Word)
↓ Download Free Construction Subcontractor Contract (PDF)