Mistake
No non-solicitation clause
Without a non-solicitation clause, nothing stops the sub from going directly to your client after the engagement ends — cutting you out of future work you introduced them to.
Free. No signup. Flow-down terms, insurance requirements, payment timing, IP ownership — everything you need when you hire a sub to deliver client work.
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What a subcontractor agreement is for
A subcontractor agreement governs the relationship between a prime contractor and a subcontractor delivering part of the prime's obligations to an end client. It flows down the relevant terms from the prime contract, defines payment timing, allocates IP, requires insurance, and prevents the sub from going around the prime to the client.
Agencies outsourcing specialized work (development, translation, photography) to subs. General contractors subbing out trade work. Any prime contractor who brings in help to deliver on a client contract.
Every time you bring in a subcontractor on a client engagement. Without a sub agreement, the sub has no confidentiality obligations, no IP assignment, and no prohibition on going direct to your client.
Not appropriate for direct client relationships — the sub works for you, not the end client. If the sub will interact directly with the end client, structure it as a separate engagement with a service agreement.
What BizDraft asks you
Prime contractor and subcontractor names, entity types, states.
What the sub will deliver as part of the prime contract.
Which terms from the prime contract bind the sub — IP, confidentiality, compliance.
Pay-when-paid or pay-when-due. Payment schedule and invoicing process.
All sub's work product is assigned to the prime on payment.
Required coverage types and minimums — general liability, E&O, workers' comp.
Sub cannot solicit the end client directly during and after the engagement.
Governing state and dispute resolution process.
What the AI generates
Plain-English, structured for the sub relationship. The clauses that protect your client relationship and ensure the sub stays in lane.
Specific work the sub will perform, deliverable format, deadline, and quality standards consistent with the prime contract requirements.
Confidentiality, IP assignment, and compliance obligations flowing down from the prime contract to bind the sub as if they were a party to the prime contract.
Pay-when-paid or net-30 from acceptance. Invoice process, late payment, and pay-when-paid carve-out if the prime client defaults.
All work product created by the sub is assigned to the prime on payment. Sub retains no residual rights to the work product.
Required coverage minimums, requirement to name prime as additional insured, and certificate delivery obligation.
Sub cannot directly solicit or engage the end client for related services during the engagement and for a defined period after it ends.
Common mistakes
The most common ways prime contractors get burned by unprotected sub relationships.
Mistake
Without a non-solicitation clause, nothing stops the sub from going directly to your client after the engagement ends — cutting you out of future work you introduced them to.
Mistake
If the sub owns what they built, you cannot fulfill your IP assignment obligation to your end client. Sub IP must be assigned to you on payment.
Mistake
Unlimited pay-when-paid terms in some states are unenforceable. Specify a maximum waiting period before payment is due regardless of whether the prime has been paid by the end client.
Mistake
If an uninsured sub causes harm to the client's data or property, the prime contractor may be on the hook. Require adequate insurance and get a certificate of insurance before work begins.
Example
"Web agency subbing out mobile development to a dev shop. $18,000 for the mobile scope. Net-30 from our invoice acceptance. Sub owns no IP. $1M general liability required. 12-month non-solicitation of our client. All prime contract confidentiality terms flow down. Ohio law."
An 11-section subcontractor agreement, Ohio-governed. $18,000 net-30 from prime's acceptance of deliverables. Full IP assignment on payment. $1M general liability certificate before work begins. Prime listed as additional insured. Prime contract confidentiality flows down. 12-month non-solicitation of the named end client.
Word (.docx) for editing in any tool. PDF for sending out as-is. Both formats, no watermark, no account needed.
When to ask a lawyer
BizDraft is a drafting tool. It is not a substitute for a lawyer who knows your specific situation. Reach for one when:
Federal and state government contracts have mandatory flow-down requirements (FAR, DFARS) that must be included in subcontracts. Attorney review is required.
Construction sub agreements have specialized mechanics lien, pay-when-paid, and retainage rules that vary by state. Use a construction-specific attorney for these.
Subcontracts over $100,000 or involving critical deliverables for enterprise clients warrant attorney review of indemnification, insurance requirements, and liability allocation.
FAQ
Flow-down means certain terms from the prime contract are incorporated into the sub agreement and bind the subcontractor as if they were a direct party to the prime contract. Common flow-down terms include confidentiality, IP assignment, and compliance with client policies.
Pay-when-paid means the prime pays the sub only after the end client pays the prime. Enforceability varies by state — some states treat it as a timing clause only (payment is delayed, not contingent), others enforce the contingency. To be safe, include a maximum waiting period even with pay-when-paid language.
Sometimes, sometimes not — and for non-solicitation purposes, it matters. The non-solicitation clause is most effective when it names the specific client. If the prime wants to keep the client identity confidential, the clause needs to be drafted with a description rather than a name.
Only if the sub agreement allows it. If the sub agreement is silent, the sub can generally delegate performance but remains responsible for it. If the prime needs to approve further sub-delegation, that approval requirement should be explicit in the agreement.
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