What subcontract terms should an electrical contractor watch for?
The ones that move money or risk onto you: when and whether you get paid, how much is held back, liquidated damages passed down from the owner, broad indemnity, no compensation for delays, back-charges, when the warranty starts, and clauses that bind you to the whole prime contract. Read them before you sign, compare them with your proposal, and have the subcontract reviewed when the job is large.
Pay-when-paid delays your payment until the GC is paid; pay-if-paid can mean you're never paid if the owner doesn't pay. How these are treated depends on where the job is.
Retainage or holdback
How much is held from each payment, and when it's released. Release tied to the end of the whole project, not your work, can hold your money for a long time.
Liquidated damages
Whether the owner's daily damages for late completion are passed down to you, and whether they're capped or limited to delay you caused.
Indemnity
Whether you cover only your own negligence, or losses others caused too. Broad indemnity can be more than your insurance covers.
Delays and changes
No-damages-for-delay clauses, short notice periods for claims, and changes you must perform before the price is agreed.
Back-charges, warranty and flow-down
How back-charges are decided, when your warranty starts, and clauses that bind you to the prime contract you haven't seen.
Before you sign
Ask for the prime contract the subcontract refers to. Compare the subcontract with your proposal: your exclusions, clarifications and validity period should survive, not be overwritten. Mark up what you can't accept and send it back. This page is general information, not legal advice; for a large job or unfamiliar terms, have a construction lawyer review the subcontract.
Questions estimators ask
What is a flow-down clause?
A clause that binds the subcontractor to the GC's contract with the owner, as it applies to your work. It can bring in terms you've never read, so ask for the prime contract.
Can I change the GC's subcontract?
Often, yes. GCs expect markups on some clauses, especially indemnity, payment and delay. Raise them before you sign, not after a problem.
Does Bidprobe review the subcontract?
Bidprobe reviews the tender package, including the front-end documents, and flags risky contract terms there, each tied to the page it came from. It isn't legal advice and doesn't replace a lawyer's review of the subcontract you sign.
See the risky terms while you're still pricing.
One free bid check on every new account, no card required. Most checks come back in 5 to 15 minutes.